MBA_612_Strategic Management

MASTER OF BUSINESS ADMINISTRATION SEMESTER-III STRATEGIC MANAGEMENT MBA612

CHANDIGARH UNIVERSITY Institute of Distance and Online Learning Course Development Committee Prof. (Dr.) R.S.Bawa Pro Chancellor, Chandigarh University, Gharuan, Punjab Advisors Prof. (Dr.) Bharat Bhushan, Director – IGNOU Prof. (Dr.) Majulika Srivastava, Director – CIQA, IGNOU Programme Coordinators & Editing Team Master of Business Administration (MBA) Bachelor of Business Administration (BBA) Coordinator – Dr. Rupali Arora Coordinator – Dr. Simran Jewandah Master of Computer Applications (MCA) Bachelor of Computer Applications (BCA) Coordinator – Dr. Raju Kumar Coordinator – Dr. Manisha Malhotra Master of Commerce (M.Com.) Bachelor of Commerce (B.Com.) Coordinator – Dr. Aman Jindal Coordinator – Dr. Minakshi Garg Master of Arts (Psychology) Bachelor of Science (Travel &Tourism Management) Coordinator – Dr. Samerjeet Kaur Coordinator – Dr. Shikha Sharma Master of Arts (English) Bachelor of Arts (General) Coordinator – Dr. Ashita Chadha Coordinator – Ms. Neeraj Gohlan Academic and Administrative Management Prof. (Dr.) R. M. Bhagat Prof. (Dr.) S.S. Sehgal Executive Director – Sciences Registrar Prof. (Dr.) Manaswini Acharya Prof. (Dr.) Gurpreet Singh Executive Director – Liberal Arts Director – IDOL © No part of this publication should be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording and/or otherwise without the prior written permission of the authors and the publisher. SLM SPECIALLY PREPARED FOR CU IDOL STUDENTS Printed and Published by: TeamLease Edtech Limited www.teamleaseedtech.com CONTACT NO:01133002345 For: CHANDIGARH UNIVERSITY Institute of Distance and Online Learning 2 CU IDOL SELF LEARNING MATERIAL (SLM)

First Published in 2021 All rights reserved. No Part of this book may be reproduced or transmitted, in any form or by any means, without permission in writing from Chandigarh University. Any person who does any unauthorized act in relation to this book may be liable to criminal prosecution and civil claims for damages. This book is meant for educational and learning purpose. The authors of the book has/have taken all reasonable care to ensure that the contents of the book do not violate any existing copyright or other intellectual property rights of any person in any manner whatsoever. In the event, Authors has/ have been unable to track any source and if any copyright has been inadvertently infringed, please notify the publisher in writing for corrective action. 3 CU IDOL SELF LEARNING MATERIAL (SLM)

INDEX UNIT 1: Strategic Management............................................................................................. 5 UNIT- 2 Strategic Intent...................................................................................................... 24 UNIT- 3 Internal Analysis................................................................................................... 41 UNIT-4 External Environmental ......................................................................................... 60 UNIT- 5 Grand Strategies ................................................................................................... 82 UNIT 6: Types of Strategy ................................................................................................ 107 UNIT 7: Tailoring Strategy to Fit Specific Industry........................................................... 150 UNIT 8: Strategy Implementation ..................................................................................... 175 UNIT 9: Behavioural Issues In Implementation................................................................. 201 UNIT 10: Functional Plans and Policies ............................................................................ 218 UNIT 11: Strategic Evaluation and Control ....................................................................... 232 4 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT 1: STRATEGIC MANAGEMENT Structure 1.0 Learning Objectives 1.1 Introduction 1.2 Strategic Management 1.2.1 Benefits of Strategic Management 1.2.2 Risks of Strategic Management 1.3 Concept of Strategy 1.3.1 Mintzerbg’s 5Ps of Strategy 1.3.2 Difference between Strategy and Tactics 1.4 Strategic Management Process 1.5 Levels of Strategy 1.6 Summary 1.7 Keywords 1.8 Learning Activity 1.9 Unit End Questions 1.10 References 1.0 LEARNING OBJECTIVES After studying this unit, student will be able to:  State the meaning, nature and significance of strategic management.  Elucidate the dimensions and benefits of strategic management.  Identify the risks involved in strategic management.  Discuss the strategic management process. 5 CU IDOL SELF LEARNING MATERIAL (SLM)

1.1 INTRODUCTION Strategic Management is an interdisciplinary course that combines many diverse elements into a unit. Strategic Management covers a comprehensive view of the environment which includes the buyers, competitors, suppliers, the economy, government, technology, capital markets and worldwide forces. The peripheral environment is viewed as dynamic and is characterized by uncertainty. This course on strategic management imports and unifies all the ideas, concepts and theories from the functional courses of General Management such as Finance, Statistics, Accounting, Marketing Economics and Organizational Behaviour. According to the general management viewpoint, the organization is viewed as a whole, and how policies in all areas which is functional are combined as an overall competitive strategy. This course involves the selection of competitive strategies, creation and defence of competition advantages, which define the firm limits and allocate acute resources over time. Such important decisions are made only by inspecting the firm holistically for a given period of time.  Analyse the fundamental and structural features of the concerned industry and devise strategies to position the firm in the most advantageous position in comparison to the competition and influence of the industry structure to enhance industry attractiveness.  Identify the various stages of industry evolution and recommend the best strategies for each stage.  Evaluate the capabilities and resources of the firm with respect to their ability to confer viable competitive advantage and formulate strategies that work out strategies that leverage a firm’s core competencies.  Demonstrate the concept of the competitive advantage and its sources and relate to the real-world scenarios.  Distinguish between principal categories of competitive advantage: Cost and differentiation and devise strategies to generate a cost and/ or a differentiation advantage.  Examine the dynamics in competitive rivalry including first-mover advantage, competitive action, competition and winner-take-all and provide appropriate recommendations for proactive and defensive line of actions.  Formulate strategies for exploring business opportunities internationally and this includes foreign entry strategies and international location of production capabilities.  Provide recommendations for vertical changes that happen within the realms of the firm with respect to the advantages of vertical integration and outsourcing and also the factors that determine the relative efficiency of each function.  Recommend bringing about horizontal changes within the firm with respect to the knowledge of the conditions under which diversification unlocks value. 6 CU IDOL SELF LEARNING MATERIAL (SLM)

 Demonstrate the ability of critical thinking with regards to a particular problem, situation or a strategic decision through practical or real-world scenarios.  Identify the strategic decisions that may lead to ethical challenges and then make suitable recommendations for ethical decision-making. 1.2 STRATEGIC MANAGEMENT Strategic Management includes the identification and description of strategies that managers may deploy to achieve superior competitive advantage and organizational performance. A firm is believed to have competitive advantage if it is more profitable than all other establishments in the same industry. It is a collection of decisions and activities taken by a manager that determines the performance of a firm. A complete information and an analysis of the overall competitive organizational environment are mandatory for the manager to take the accurate decisions. The manager needs to conduct a SWOT (Strength, Weakness, and Opportunities) Analysis and should make the best probable utilization of strengths, reduce the organizational shortcomings, utilize the available opportunities from the commercial environment without ignoring the threats. Preparation for both predictable and unfeasible contingencies are the key features of strategic management. This is appropriate to both large as well as small organizations, as even the smallest establishment can face competitive environment and by effective preparation and execution of strategies, the organization can successfully attain competitive advantage. The strategists follow the path of setting about the organizational objectives and then move ahead to attain them. The path followed by strategists involves making and executing decisions aimed at the futuristic direction of the business. Strategic management is a constant process that comprises of assessment and regulation of the business in which an organization is involved. It also evaluates the competitors of the organization and arranges goals and strategies to take up the challenges from all present and possible competitors. The strategies of the organization are revisited from time to time to ascertain its implementation and if it was successful or needs replacement. Strategic Management provides a wide viewpoint to the workers of an organization by helping them in having a better understanding of how their job profile fits into the organizational plan as a whole and also how their role is co-related to their colleagues. It includes the fine art of handling employees in a way that leads to maximization of the skill of the organization to achieve its business objectives. The benefits include increase in trust worthiness of the workers, more commitment towards the business, and greater employee satisfaction as they are now able to co-relate better with the individual organizational tasks. Know-how on strategic management helps employees understand the reactions to the environmental changes in the organization and the probable line of action that need to be 7 CU IDOL SELF LEARNING MATERIAL (SLM)

followed. In this way, the employees are capable to ascertain the impact of the environmental changes in the organization and are well equipped to effectively face the changes. The workers and the managers are expected to carry out their job responsibilities appropriately to be both effective and efficient. A major role of strategic management is the complete incorporation of the functional areas of the business and ensuring that these functional areas synergize well. Further, strategic management also plays the role of keeping a close watch on the adherence to the organizational goals and objectives. Strategy can be termed as an “action” that managers take to accomplish organizational goals. It is defined as “A general direction set for the establishment and its various parts to attain a desired state in the upcoming future. A detailed strategic planning process results in the drafting of strategy for an organization”. A strategy comprises integration of structural activities and utilization and allocation of scarce resources within the organizational environment to meet the set goals and objectives. Strategy needs to be carefully planned and it needs to be ensured that the decisions are not taken in vacuum. Further, any action likely to be taken by the organization may lead to reaction from the affected stakeholders such as employees, suppliers, customers and employees. Strategy clearly is the knowledge of goals, the unpredictability of events, and the prerequisite to consider the probable behaviour of other entities. Strategy can be measured as the blueprint of the decisions taken in an organization that depicts the objectives and goals and defines the business activity that the company has to carry on, the nature of economic and human organization that it wants to be, and the benefits it plans to hand out to its shareholders, consumers and the society at large. Example: The following short story exemplifies the notion of strategic management, which is, achieving and maintaining competitive advantage: Two company CEOs competing in the similar industry, once decided to discuss a possible merger of their companies. They planned to hold discussions on a camping trip deep in the woods. All of a sudden, grizzly bear came snarling at them. One of the CEOs immediately put on his pair of jogging shoes and prepared run. Looking at this, the other CEO said, “Hey you cannot outrun a bear”. The CEO who was putting on his jogging shoes responded, “Maybe I can’t outrun the bear, but I can surely outrun you!” 1.2.1 Benefits of Strategic Management Strategic management supports in changing the organizational approach from reactive to a proactive one and allows the organization to initiate and impact than to just respond to 8 CU IDOL SELF LEARNING MATERIAL (SLM)

external or internal occurrences. This helps the organization to take control of its own destiny. Key people of both for profit and non-profit organisations like the managers, presidents, chief executive officers and the business owners themselves have recognized and realized the advantages of strategic management. Historically, the major advantage of strategic management was to aid organizations in formulating better strategies by employing a more systematic, more logical and more rational approach to strategic choice. Over several years now, this has remained to be a primary advantage of strategic management. However, research studies have now indicated that the process holds more importance than either the documents or the decisions related to it. Dialogues and participation by the managers and workers have been found to help in this process. This shows that communication is the key to successfully implement strategic management process. Identification, prioritization and exploration of new opportunities are some of the advantages of strategic management. For example, forays into new lines of businesses, development of new products, entry into newer markets is possible only if the firms undertake strategic planning. Strategic management also allows the companies to take an objective view of its various activities and carry out a cost benefit study to determine if the company is profitable. Here, the financial benefits (which will be discussed below) are not the only yardstick for assessing the profitability of the firm but, other several such factors such as whether the business have strategic alignment to its goals and priorities should also be taken into consideration. To summarise the learning till now, strategic management allows a firm to align itself to the market and the consumers it had chosen to serve and ensure that it is following the right strategy. Financial Benefits From different studies, it has become evident that firms that follow strategic management processes turn out to be more profitable and successful than those who do not. Firms are able to exert greater control over their future by engaging in forward looking planning and careful evaluation of their priorities, which is a necessity in the fast-changing business landscape of the 21st century. According to an estimate the major reasons of failure of about 100,000 businesses every year in the U.S. is due to a lack of strategic focus and strategic direction. Further, high performing firms are able to sustain their progress due to more informed decisions and orientation of strategies after taking into consideration both the short-term and long-term consequences. Quite in contrast, those firms that do not have a strategic planning process in place are often bogged down by internal problems and lack of focus leads to failure. Non-Financial Benefits 9 CU IDOL SELF LEARNING MATERIAL (SLM)

The above section elaborated on some of the physical benefits of strategic management. There are benefits other than those stated above for firms which indulge in strategic management, some of them are: An awareness of the external threats, a better understanding of the competitor strengths and weaknesses and increased employee productivity. Engaging in strategic management also leads to a lesser struggle to change and increases clarity of the link between rewards and performance. The most significant aspect of strategic management is that the problem solving and problem preventing capabilities of the firm are amplified through this process. It is instrumental in rationalising and engineering change to be implemented in the organisation and then helps to better communicate the need to change to the employees. Finally, following the strategic management process helps in maintaining the disciple and order in the diverse undertakings of the firm which include both external processes and internal activities. 1.2.2 Risks of Strategic Management Strategic management is a complex process where an organization enters into uncharted territory. However, it does not provide a ready-to-use prescription for attaining success. Instead, the organization engaging in this process is taken through a journey and is offered a structure for addressing questions and resolving problems. However, this process is not a guarantor of success and may cease to function efficiently if not followed in a well-planned and a systematic fashion. Limitation of Assumption Strategic management is based upon a set of assumptions. Only if the assumptions are good and based on firm grounds then the futuristic planning of the firm based on strategic management can be expected to be successful. Problem in Analysing Environment A correct analysis of the external and internal environment is a determining factor for the success of strategic management. With reference to this scanning of the external environment is more important so as to grab the available opportunities. Unrealistic Mission and Objectives Strategic management will be unsuccessful if the tasks and purposes are unrealistic. Problem of Setting Target Implementation is as important else, there may be impediments in achieving the desired results. Lack of Commitment of Lower Level 10 CU IDOL SELF LEARNING MATERIAL (SLM)

There may be commitment below par from the lower-level management if the top-level management do not carry out consultations with the lower-level management at the time of framing of strategies. Problem of Resistance Acceptance issues are seen by workers when targets are set. More theoretical in Nature As per the opinion of experts, strategic management is usually unsuccessful due to its theoretical nature. Problem of Internal Politics Many times, strategies become unsuccessful in organizations because of differences amongst or between the departments. Thus, an absence in good relations and proper coordination within and between departments results in unsuccessful strategies. Problem of Traditional Management Strategies usually cannot be fruitful in the traditional way of management. This is because the outlook is not a progressive and the objective is to run the business in the way it has always been run. 1.3 CONCEPT OF STRATEGY Strategy - Definition, Nature, Features and Importance Strategy is an action taken by managers to achieve organizational goals. Strategies are clearly a general direction set or planned for the organization and its various components to achieve a desired state in the future. A detailed strategic planning process results in a good strategy. A strategy comprises of integration of all organizational activities and utilization and distribution of scarce resources within the organisational environment to meet the set objectives. While a strategy is being planned it is important to recognize that decisions cannot be taken in isolation and that any action taken by the firm is likely to be met with a response from those affected like competitors, suppliers, customers or the firm’s own employees. Another definition of strategy is it is the knowledge of the goals, the uncertainty of events and the need to take into consideration, the predicted or actual behaviour of others. Strategy is that blueprint or plan of decisions taken in an organization that shows its goals and objectives and plans for achieving these, reduces the number of key policies, and describes the business which the company has to carry on, the sort of economic and human organization it wants to be, and the contribution it devices to make to its shareholders, consumers and the society at large. Features of Strategy 11 CU IDOL SELF LEARNING MATERIAL (SLM)

The difficulty to predict the future makes strategy significant for an organisation. The firms, without any farsightedness, must be ready to deal with unexpected events in the business environment. Strategy does not deal with short term developments, but long-term ones. It deals with the probability of improvements or development of new products, new methods of production, or new markets to be nurtured and developed in the future. Strategy is prepared to consider the possible behaviour of consumers and competitors. Strategies concerning employees foresee the employee behaviour. Strategy provides a well- defined roadmap for an organization. It plays the role of defining the overall vision, mission and direction of the organization. The objectives of a strategy are maximizing the strengths of the organization and at the same time to minimize the strengths of the competitors. To summarize, strategy offers to bridge the gap between “where we want to be” and “where we are”. 1.3.1 Mintzerbg’s 5Ps of strategy Henry Mintzberg, the Canadian management scientist in 1987, distinguished five visions for strategy in organisations. He called them the 5 P's of Strategy and were Plan, Pattern, Position, Perspective and Ploy. The aforementioned five components enable an establishment to implement a more effective strategy. A strategy is aimed at the future, is concerned about the long term and considers different aspects of an organization. Although competition is present and is considered, it would be lacking in foresight to develop strategies which are only aimed at the competitors. As per Mintzberg’s views, development of a good strategy is difficult. The 5 P’s of Strategy help in including as many different aspects as possible and this method the strategy from diverse perceptions. Plan A strategy is a plan that helps in dealing with future situations. A plan needs to be made before any possible actions are taken and it is essential that the plan needs to be followed determinedly and effectively. Achievement of goals hinges on how good the strategy or the plan is. The strategy enables the managers to provide their teams with clarity and motivates them to work towards temporary evaluations and concluding results. A clear organizational strategy however requires or needs more than just one plan. Pattern While creating a plan is about the anticipated strategy, patterns of the strategies that were implemented before are also taken into consideration. There are approaches that had achieved the intended results as well as those that need to be worked out in more detail. The patterns of strategies planned and implemented earlier become an essential part of the development of new strategies. This is a pattern or how it works in the decision-making flow. Future choices of decisions to be made are influenced by patterns followed in the past. In these cases, past behaviour is a pattern that is included in strategy development for the future. It is about consistency in behaviour, whether intentional or unintentional by the workers of the 12 CU IDOL SELF LEARNING MATERIAL (SLM)

organization. Patterns are usually accepted without bias by everyone. Awareness of such arrangements within the business, helps in incorporating their assets in the development of a strategy. Position The position refers to the organization’s place in the market, interface between the internal and external context. It is critical to carefully consider in advance how the organisation wants to position itself. The organisation needs to ponder upon the possible match between its identities in the future with respect to the shareholder expectations. This will surely help in developing a long lasting and competitive advantage. Taking into consideration the strategic position helps against competitors and also provides the organisation with a secure place in the marketplace. Perspective Strategy is not only about the selected position; it is also about the superior perception. It is critical to find out the way various target audiences perceive the organization. What opinion do the workers hold about their organization? What is the image of the organisation in front of its consumers and investors or stockholders? All of these individual perceptions and assumed patterns are an indispensable source of information for the organization, which can make strategic choices. Ploy Using a ploy is a strategic choice which can be for example one that the competitors are least expecting. Organizations may surprise their setting by implementing a strategy that were least anticipated. For example, a telephone service provider may mislead others by all of a sudden offering both internet data service and digital high-definition television, thus putting them in competition with existing providers of such services. Such ploys help outsmart competition. 1.3.2 Difference Between Strategy and Tactics Strategy and tactical planning differ in several aspects. Strategic planning is a long term one used to set the destination and how the organization is going to reach the same. Tactical planning outlines the specific actions that need to be taken along the way to the destination set by strategic planning. Below, we will present and compare strategy vs. tactics, the differences and similarities between the two, and provide explanation on how the progress of each can be tracked. About 2500 years ago, the Chinese military strategist Sun Tzu wrote about strategy and tactics in his book called “The Art of War”. According to him, “Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.” Strategy and tactics and are not in opposition to each other but are on the same team and this has been like this for centuries. Here is how we define the strategic vs. the tactical:  Strategy defines the long-term structural goals and the way to plan for achieving them. In other words, your strategy provides you with a path towards achieving the structural mission. 13 CU IDOL SELF LEARNING MATERIAL (SLM)

 Tactics are much more concrete and are quite often aligned towards smaller steps and a shorter time frame along the way. They comprise of best practices, specific plans, resources etc. They are also called initiatives. A solid strategy reflects the central values of the organization. The strategy team should gather inputs from across the organisation to ensure that there is alignment between the strategy and each department’s priorities. Further, all strategies are to be actionable. While creating a good strategy, focus needs to be on the desired result (the goal). Your strategy lays the foundation for all the activities within the organization and the way it is crafted will guide decision making as your teams work on achieving the set goals. If a furniture company for example has a goal to expand its market share, the strategy of the company could include offering the most competitive prices and always keeping a stock of common offerings. Leadership teams need to take decisions that prioritize that select lower costs. A good tactic is characterized by a clear resolution and aids your strategy. It has a definite timeline during which specific activities need to be completed and their impacts measured. A tactic active by the furniture company would be to carry out an analysis of the manufacturing process with the objective of minimizing waste and inefficiencies and thus help in decreasing cost which ultimately also leads to reduced prices for the customers. The success of this tactic can be evaluated by a comparison of the costs before and after the analysis. Here are a few examples to help distinguish between strategy and tactics and also how they interact:  Strategy is based upon Extensive Study, Planning and Internal Reflection. Strategy is a long-term vision while, tactics are relatively short-term actions. For example, the marketing strategy of an establishment is the improvement of the company’s influence and performance in social media, the tactics that need to be employed would be determination of the best channels for the business as well as choosing the most effective messages for the audiences. Strategies can be altered or modified in order to be relevant to new internal and external factors in an organization, but these changes should be deep rooted in management principles and adhere to the organizational vision and mission. Tactics, being short-term and employed to aid with the achievement of strategic goals, can be changed to suit the strategy. It is very important to make your strategic planning thorough as it is tough to make an overhaul of strategy. Tactics, however, can be changed or adjusted as required to achieve the final organizational goals.  Strategy and Tactics Work Hand in Hand as Means to an End: Suppose your strategy is to climb a mountain a key strategy would be deciding about the side of the mountain that you need to climb. While the tactics can be deciding on the people who would accompany you to the summit, the gear you need to select, the duration of your trip and the complete trip plan, the most appropriate season to climb the mountain and so on. Tactics are key for execution of strategies so that the set goals are achieved. 14 CU IDOL SELF LEARNING MATERIAL (SLM)

 Strategy and Tactics need to be Compulsorily In-Line with One Another. Your long- term strategy will decide if a tactic however obsessed you are with, needs to be employed. Thus, the organizational strategy is key to selection of the tactics to be funded or executed.  The Best Strategy and Tactics Will Still Not Cover Everything. As the resources of your company are limited, it is important that the right strategy and the relevant tactics are employed so that the organizational vision is achieved in the most proficient manner possible. Suppose your organisation’s overarching mission is the reduction of the carbon footprint as result of all its different activities. If the strategy is a reduction of the carbon emissions in a particular area, then the goal to be achieved may be to educate people on the several of renewable energy options. A tactic to achieve this goal may be to conduct a marketing campaign with the help of television advertisements. The marketing campaign can then be executed by tracking the resources needed for the project, ticking items off the checklist as the tasks are being completed like, hiring the producer, writing the script, shooting the different scenes, editing the video to be used in the campaign, and so on. 1.4 STRATEGIC MANAGEMENT PROCESS Development of the organizational strategy comprises of four main elements viz., strategic analysis, strategic choice, strategy implementation and the evaluation and control of the strategy. Each of these four elements consists of further steps which corresponds to a series of decisions and action to be taken, and these form the foundation of the strategic management process. Strategic Analysis In the meaning of the organizational purpose, lies the foundation of strategy which is devised to realise the former. Foundation of the strategy defines the line of business of the organisation as also the identity of the organisation. The organization first develops a broad statement of purpose which forms the idea and mission statements. These statements then form the launch pad for the development of more specific objectives and selection of strategies devised to achieve them. The next step in the strategy process constitutes of the environmental analysis, comprising of the internal and external environments of the organization. One of the roles of the managers is to assess the threats and opportunities of the external environment keeping in view the strengths and weaknesses of the organization while also considering the expectations of the stakeholders. Such an analysis permits the organization in setting more specific goals or objectives, with directions to the employees on the parts where they need to focus as part of their roles and responsibilities. Strategic Choice The above stage of analysis forms the basis for the strategic choice. This permits the managerial staff to contemplate on the possible actions to be taken taking into consideration the mission, environment and capabilities – their choice of actions to be taken, in addition 15 CU IDOL SELF LEARNING MATERIAL (SLM)

reflects the values of the managers and the other stakeholders. (Dobson et. al. 2004). The above choices concern the overall scope and direction of the business. Managers usually have several strategic options, which need to be analysed by them on the basis of their feasibility, suitability and acceptability before the final direction can be decided upon. Strategy Implementation The execution of strategy is dependent upon ensuring that there is a suitable structure, the right resources and competencies like finance, skills, technology etc., and the right leadership and culture. This is dependent upon the operational factors that have been put into place. Strategy Evaluation and Control Organizations put in place suitable control systems, monitoring to develop standards and targets so as to evaluate performance. 1.5 LEVELS OF STRATEGY Strategy forms the basis of every decision that needs to be taken in an organization. A strategy that is poorly chosen and formulated by the top leadership has a direct influence on the efficacy of the workers in almost all departments of the organization. In the previous article on “What is Strategy? an attempt has been made to define and explain about trade strategy and what cannot be said to be a part of strategy. In this article we will attempt at dissecting strategy into three diverse components which can be termed as the “Levels of Strategy”. The three levels of strategy are: Corporate-level strategy, functional level strategy and Business-level strategy. The three levels of strategy together can be illustrated with the help of a so-called “Strategy Pyramid” (depicted in Figure 1.1). Corporate-level strategy is distinct from Business-level strategy and Functional-level strategy. Although Corporate-level strategy has been placed at the top of the pyramid we shall start the article by discussing about Business-level strategy first. 16 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 1.1: Strategy Pyramid Business-level Strategy People are familiar with Business-level strategy and involves asking questions like: “How do we compete?”, “How can we gain a (lasting) competitive advantage over our competitors?”. A good understanding of what business is all about and its external environment is central to be able to answer these questions. Internal analysis frameworks such as VRIO Model and Value Chain Analysis; in addition to the external analysis frameworks like Porter’s Five Forces and the PESTEL Analysis is instrumental in understanding the external and internal business environment. After satisfactorily carrying out the strategic analysis, the topmost management, with the assistance of frameworks such as the Porter’s Generic Strategies, Value Disciplines, and Blue Ocean Strategy can engage in formulation of the strategy. Finally, the aim of the Business-level strategy is to gain a competitive advantage by offering true value for the end-customers while it also helps the organization in becoming a unique player who is hard-to-imitate in the competitive sphere. Functional-level Strategy Questions like “How can business-level strategy be supported in functional departments like Production, Marketing, HR and R&D?” concerns Functional-level strategy. Such strategies are mostly aimed at helping to improving the efficiency of the company’s operations in these functional departments. Within these functional departments, the workers frequently refer to their ‘Marketing Strategy’, ‘R&D Strategy’ and ‘Human Resources Strategy’. The intended goal is alignment of these functional strategies to the maximum, with the general business 17 CU IDOL SELF LEARNING MATERIAL (SLM)

strategy of the organization. Suppose the business strategy is meant to offer products to young adults as well as students, the company’s marketing department should be using the appropriate (social) media channels to accurately target these prospective customers. Technically, such decisions are operational in nature and hence should not be termed as being part of the strategy. Thus, they can be more appropriately clubbed under ‘tactics’ than ‘strategies’. Corporate-level Strategy The corporate-level strategy concerns about the management deliberating on ways to increase competitive advantage in multitude of lines of businesses the firm is operating in, apart from a prioritization of these businesses. It is about creating a portfolio; by selection of an optimal set of businesses and determining on how these can be amalgamated into the corporate as a whole. Major investment and divestment decisions are frequently taken at this level by the top management. Mergers and Acquisitions (M&A) is an integral part of corporate-level strategy. The need for stitching together an internally consistent corporate-level strategy due to the company operating in multiple business areas through diverse business units with unique business-level strategies necessitates corporate-level strategy. This is the reason, corporate-level strategy is not often found in small and medium enterprises (SME’s), but is found in conglomerates or multinational enterprises (MNE’s). Example: Now, let us take the example of Samsung, a conglomerate that is comprised of several strategic business units with multitude sets of products. Samsung offers diverse products like cameras, laundry machines, chemicals, TVs, microwaves, refrigerators and been insurances. A business strategy has been defined for each strategic business unit to enable it to compete successfully within its own industry. At the corporate level however, Samsung Company has to decide on fundamentals question on the business areas where it should continue to operate or perhaps discontinue offering products. Samsung may debate at the corporate strategy level if it needs to continue operating in the camera business or perhaps it should be concentrating more in the smartphone or the television screen businesses in terms of new investments and innovations. The GE McKinsey Matrix and the BCG Matrix are portfolio analysis frameworks that are used to answer questions similar to the Samsung Company example mentioned above. 18 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 1.2: Levels of Strategy Levels of Strategy Business strategy is the most common level strategy and exists in strategic commercial units and helps devise goals to gain a competitive advantage in a particular market. If a certain company consists of multiple strategic business units (SBU’s), a Corporate strategy that unites all SBU’s through a corporate configuration is required. The top leadership of the company needs to decide on the allocation of resources and the avenues for investment and divestment. Finally, functional strategy is relevant in the functional departments like HR, Production and Marketing. Due to the operational nature of these departments, the tactics are more relevant than strategies in these functional departments. 1.6 SUMMARY  Strategic Management is the art & science of implementing, formulating, and evaluating, cross-functional decisions that enable any establishment to achieve its goals.  Strategic management includes elements geared toward a company’s long duration survival and accomplishment of management goals.  Strategic management relates varied areas of a company’s operations. This makes it necessary to involve the topmost management in its decision-making processes.  Strategic management recommends that the company commits to its decisions on the future course of action over an extended period of time. This long-term commitment on the portion of the company necessitates availability of substantial resources like physical assets, manpower etc.  Strategic management includes forecasts on what to anticipate by the managers. The managers here need to develop projections that will help enable the firm in selecting the best and most promising strategic options. 19 CU IDOL SELF LEARNING MATERIAL (SLM)

 Although strategic management requires that the decisions be made relatively rarely, the company need to be ready to make sudden strategic decisions. This the reason why Ansoff calls them “non-self-generative” decisions.  Strategic management offers a road map for the company. It makes it possible for the company to take decisions regarding the upcoming future with a better awareness of their implications.  Strategic management benefits the organisation by facilitating opportunities to exploit new and diverse areas of business; while long-term planning helps to optimise for tomorrow, the trends of today.  It is fundamental for the success of strategy that it should be understood by all the concerned stakeholders. The teams involved should be aware of the tactics to be adopted to be able to contribute towards the overall goals of the organisation.  Implementation of your strategy required mandatory approval from the stakeholder and addressing of any hesitations on their part. Once all concerns of the stakeholder have taken care of, the strategy execution may commence. The strategy is then communicated throughout the organisation, with explanation of the meaning and context around each and every department’s activities. 1.7 KEYWORDS  Value Chain Analysis: It is a set of accomplishments that a company operating in a specific industry performs to deliver a valued product for the marketplace.  Diversification: It is the process of allocation of capital in a manner that ensures reduction of exposure to any specific asset or risk. Investment in a basket of assets reduces risk or volatility and is a common path towards diversification.  SWOT Analysis: SWOT analysis is part of the strategic planning technique used to help a person or organization to identify his/ her weakness, strengths, threats, and opportunities associated to business rivalry or project planning.  Strategic Business Unit: Strategic business unit is a profit centre focused on product offering and the relevant market segment. Every SBU usually have distinct marketing plan, analysis of competition, and marketing campaign, although they may be a part of a larger business organization.  Multinational Enterprise: Multinational enterprises, abbreviated as MNE are also frequently called as multinational corporations (MNC in short), multinationals or just international corporations, are enterprises that produce goods or deliver services in multiple nations. 1.8 LEARNING ACTIVITY Reliance Industries Limited evaluated the telecommunication sector with respect to customers, technology, regulation and competition, and made an estimate of the market 20 CU IDOL SELF LEARNING MATERIAL (SLM)

potential of the different segment in the Indian telecommunication market. The company then formulated the group’s vision and long-term strategic intent in telecom sector. The growth options in the sector and attractive investment opportunities were then recommended. Based upon this, an optimum organisational structure encompassing the various entities in the telecom sector is evolved. On the basis of the Strategic recommendations, the Reliance group was able to make critical decisions and is one of India’s leading integrate telecom operators now. 1. Discuss the recommendations and strategic Plan of Reliance in telecom industry. ………………………………………………………………………………………………… ………….……………………………………………………………………………………... 2. Compare strategy of Reliance telecom with competitor. ………………………………………………………………………………………………… ………….……………………………………………………………………………………... 1.9 UNIT END QUESTIONS A. Descriptive Short Answer Questions 1. Explain the term strategic management. 2. Discuss the various levels of strategic management. 3. Elaborate vision, mission and objectives. 4. Discuss different strategic levels in organizations. 5. Explain Mintzerbg’s 5p’s of strategy Long Answer Questions 1. What are the factors that organisations consider while making a choice of strategy? 2. What is demographic environment of business? 3. What do you understand by strategy? What are major strategic alternatives available the business organization? 4. Discuss importance of strategic management. 5. Discuss difference between strategy and tactics. B. Multiple Choice Questions 1. The main focus of strategic management is_______________. a. Strategic investigation b. Total organisation c. Strategy goals d. Strategy operation 2. __________is not an advantage of strategic management 21 CU IDOL SELF LEARNING MATERIAL (SLM)

a. Clearer sense of way and purpose b. It helps improve the political, economic, social and technological environment of the organisation c. It helps improve Strategy goals d. It helps organisations be proactive rather than reactive 3. Which of the following defines what business or businesses the firm is in or should be in? a. International strategy b. Corporate strategy c. Dysfunctional strategy d. National strategy 4. The strategic management process is___________________. a. A set of activities for average returns for the firm b. An activity concerned with a firm’s external resources, independent of the conditions in its internal environment c. A process focused by topmost management with ideas from investors d. A full set of commitments, decisions, and actions required for the firm to achieve above average returns and strategic competitiveness 5. Strategic management does not include in______________. a. Setting environment b. Analysing the external environment c. Analysing the internal environment d. Analysing the external organization Answers: 1.(b), 2.(b), 3.(b), 4.(d), 5.(d) 1.10 REFERENCES Textbooks  Barringer, B.R. (2015) Preparing Effective Business Plans: An Entrepreneurial Approach (2nd global edn), Harlow, Pearson.  Bellavitis, C., Filatotchev, I., Kamuriwo, D.S. and Vanacker, T. (2017) ‘Entrepreneurial finance: new frontiers of research and practice’, Venture Capital, vol. 19, no. 1–2, pp. 1–16.  Blundel, R., Locket, N. and Wang, C. (2017) Exploring Entrepreneurship (2nd edn), London, Sage.  Burns, P. (2016) Entrepreneurship and Small Business: Start-up, Growth and Maturity (4th edn), London, Palgrave Macmillan. 22 CU IDOL SELF LEARNING MATERIAL (SLM)

 Katz, J. and Green, R. (2014) Entrepreneurial Small Business (4th international edn), New York, McGraw-Hill Irwin. Reference Books  Drover, W., Busenitz, L., Matusik, S., Townsend, D., Anglin, A. and Dushnitsky, G. (2017) ‘A review and road map of entrepreneurial equity financing research: venture capital, corporate venture capital, angel investment, crowdfunding, and accelerators’, Journal of Management, vol. 43, no. 6, pp. 1820–53.  Woods, M. (2016) ‘7 Small Business Grants for Entrepreneurs’, StartupNation, 9 August [Online]. Available at https://startupnation.com/ start-your-business/ small- business-loans/ (Accessed on 23 October 2018). Websites  https://strategicmanagementinsight.com/  https://www.business-to-you.com/levels-of-strategy-corporate-business-functional/  https://bizfluent.com/facts-6901134-meaning-strategic-intent-.html 23 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT- 2 STRATEGIC INTENT Structure 2.0 Learning Objectives 2.1 Introduction 2.2 Vision and Mission 2.2.1 Process of Developing Vision and Mission Statements 2.3 Goals and Objectives 2.4 Stakeholders in Business and their Roles 2.5 Summary 2.6 Keywords 2.7 Learning Activity 2.8 Unit End Questions 2.9 References 2.0 LEARNING OBJECTIVES After studying this unit, student will be able to:  Explain the importance of vision, mission, and business definition.  Describe how these ideas makes the association a fruitful element.  Identify stakeholders in business. 2.1 INTRODUCTION In the field of executives and hierarchical growth, the key expectation is characterized as a convincing explanation about where an association is going that briefly passes on a feeling of what that association needs to accomplish in the long haul. The key plan infers a sizable stretch for an association. The conveying system is empowered using tasks, projects, and portfolios. Portfolios structure interests under key objectives while adjusting, adjusting, and examining limits and assets. Projects consolidate business--as--regular with undertakings and consistent state action directed by essential needs. Undertakings are transient undertakings that achieve change and accomplish arranged goals. 24 CU IDOL SELF LEARNING MATERIAL (SLM)

Together, they consolidate to convey the useful change needed to actualize, empower and fulfil the essential goal of the association. Strategic Intent drives associations to keep up the upper hand or look for another one (for example change). The essential plan prompts the improvement of explicit change activities inside a portfolio structure. Explicit activities, adjusted to the essential goal, are chosen based on accessible capacities and assets that can be conveyed. A strategic intent statement joins the vision and goals of an organization into a brief lift pitch. It helps representatives, upper service, investors, and general society to comprehend what the organization depends on and takes a stab at in both the long haul and present moment. A strategic intent statement joins the vision and targets of an organization into a concise lift pitch. It helps workers, upper service, investors, and general society to comprehend what the organization relies on and makes progress toward in both the long haul and present moment. Statements of strategic intent regularly appear to be grandiose and debauched, with a \"go for the moon\" quality. However, this language has a reason in persuading and inspiring people to run after encapsulating the mission, vision, and objectives of the organization. It's an activity that helps ensure you don't enclose yourself dependent on your present assets, or even your present impression of your capacities. Vital purpose includes allowing yourself to envision what appears to be incomprehensible, and afterward taking a stab at it, in any case, to guarantee that you stay serious in your field. En route, you'll probably come farther than you at any point expected. Shaping a strategic intent statement doesn't occur in a solitary gathering. Indeed, there are a few trademark components that should be made and settled upon before the essential aim explanation becomes animated. They include: Creating a Strategic Intent Statement Whenever you have gone through the five stages above to completely comprehend your fantasy (vision), your motivation (mission), substantial achievements as long as possible (objectives) and present moment (goals), and a guide to begin (plan), you genuinely find out about your organization than any time in recent memory. It's an ideal opportunity to assemble everything and make a strategic intent statement. In this statement, you ought to stay positive and uplifting. Whenever you're done creating this statement, it ought to be convincing to such an extent that you could place it on a standard in the workplace as a definitive spark for every one of your representatives. It should disclose to them why their work is significant and where the organization means to go. 25 CU IDOL SELF LEARNING MATERIAL (SLM)

Utilize exact language in your statement of strategic intent to keep it smart and incredible. It's alright if the statement goes through numerous rounds of altering to change words, or if you have a few vital goal guides to look over. A couple of changes could mean the distinction between whether your statement of aim functions as a helper and guide, so think about it rather than naturally picking your first draft. 2.2 VISION AND MISSION Vision Statement: The vision statement permits the organization to depict itself in ideal terms. In the ideal future, what will your organization are known for? What will you have accomplished? What will your clients consider you? What services and items will you give? Even though vision statements, at last, get sharpened into simply a sentence or two, there is no motivation behind why you can't broadly outline your vision as an accommodating device in the arranging interaction. A valuable exercise to get your inventiveness streaming is to envision that you are 80 years of age and a kid asks you what you're glad to have achieved with your organization. Compose that kid a letter from your 80-year-old self-posting the entirety of the achievements you might want to envision. A dream verbalizes the position that an association might want to accomplish in the distant future. It helps in making a typical personality and a common feeling of direction. A decent vision encourages hazard taking and experimentation. It answers the inquiry: 'What will achievement resemble?' Illustration of Vision Statement TCS :“To be amongst the 5 most admired Information Technology Solution Providers globally with leadership focus in delivery of products, solutions and services which are globally competitive.” Wipro: “To earn our clients' trust and maximize the value of their business by providing solutions that integrate deep industry insights, leading technologies and best in class delivery process.\" Strengths of Vision Statements As might be seen from the above definitions, a large number of the attributes of the vision given by these creators are basic, for example, being clear, attractive, testing, attainable and simple to impart. Nutt and Backoff have distinguished four conventional highlights of dreams that are probably going to improve hierarchical execution: 26 CU IDOL SELF LEARNING MATERIAL (SLM)

 Possibility methods the vision should involve inventive opportunities for emotional authoritative enhancements.  Desirability methods the degree to which it draws upon shared authoritative standards and values about how things ought to be finished.  Action ability implies the capacity of individuals to find in the vision; moves that they can make that are pertinent to them.  Statement implies that the vision has symbolism that is adequately incredible to impart an image of where the association is going. As per Thompson and Strickland, some significant strengths of a successful vision explanation are:  It should be effectively transferable: Everybody ought to have the option to comprehend it.  It should be realistic: It should illustrate the sort of organization the service is trying to make.  It should be directional: It should say something regarding the organization's excursion or objective.4. It should be practical: It should be something that the organization can sensibly expect to achieve at the appropriate time of time.  It should be engaged: It should be adequately explicit to furnish administrators with a direction in deciding.  It should be interesting to the drawn-out interests of the partners.  It should be adaptable: It should permit the organization's future way to change as situations develop and conditions change. Mission Statement: Your organization's statement of purpose clarifies your explanation behind existence. Why on earth does anybody need your specific item or service? What sort of a hole would you say you are filling in individuals' lives? Your statement of purpose incorporates your definitive objective and doesn't need to be substantial or quantifiable. That occurs in the following stages. Mission alludes to the reason for an association. Mission expresses the business purpose behind the association's presence. It relates the association to the general public. The mission of an association should reach skyward and simultaneously it should be sensible. It ought to give an essential course to the association. “Mission is the fundamental work given by the society to an organization\". By Koontz and Q' Ponnell “The company mission is defined as the fundamental unique purpose that sets a business apart from other firms of its type & identifies the scope of its operations in product & market terms\". By Pearce and Robinson. 27 CU IDOL SELF LEARNING MATERIAL (SLM)

Illustration of Mission Statement TCS “TCS Technology will provide products and services that not only meet but exceed the expectation of our customers through planned and continuous improvement of our Services, Products, Processes and People.” Wipro “The Spirit of Wipro is the core of Wipro. These are our Values. It is about who we are. It is our character. It is reflected consistently in all our behaviour. The Spirit is deeply rooted in the unchanging essence of Wipro. But it also embraces what we must aspire to be. It is the indivisible synthesis of the four values. The Spirit is a beacon. It is what gives us direction and a clear sense of purpose. It energizes us and is the touchstone for all that we do.” Strengths of a Mission Statement A decent statement of purpose ought to be short, clear, and straightforward. It ought to hence have the accompanying strengths:  Not long: A statement of purpose ought to be brief.  Unmistakably expressed: It ought to be straightforward so the strengths, purposes, and objectives of the association are obvious to everyone in the association and will be a manual for them.  Wide, yet not very broad: A statement of purpose ought to accomplish a fine harmony among particularity and consensus.  Rousing: A statement of purpose ought to propel peruses to activity. Representatives should think that it's beneficial to work for such an association.  It ought to stir the good sentiments and feelings of the two representatives and untouchables about the association.  Mirror the association's value: A statement of purpose ought to produce the feeling that the firm is fruitful, has born, and is deserving of help and venture.  Significant: A statement of purpose ought to be proper to the association regarding its set of experiences, culture, and shared strengths.  Current: A statement of purpose may get old after some time. As Peter Drucker calls attention to, \"Not many statements of purpose have anything like a future of thirty, not to mention, fifty years. To be sufficient for a very long time is likely every one of the ones can regularly anticipate\". Changes in ecological elements and hierarchical variables may require adjustment of the statement of purpose.  Remarkable: An association's statement of purpose ought to set up the singularity and uniqueness of the organization.  Bearing: A statement of purpose ought to ceaselessly manage and move the quest for authoritative objectives. It may not be completely accomplished, yet it ought to be trying for directors and workers of the association. 28 CU IDOL SELF LEARNING MATERIAL (SLM)

 Dynamic: A statement of purpose ought to be dynamic in a direction permitting decisions about the most encouraging development headings and the less encouraging ones.  Reason for direction: Mission statement ought to give valuable standards to choose a reason for producing and screening vital choices.  Client direction: A decent statement of purpose recognizes the utility of an association's items or services to its clients and pulls in clients to the firm. 2.2.1 Process of Developing Vision and Mission Statements Making your association's vision and statements of purpose are the initial two stages in the \"VMOSA (Vision, Mission, Objectives, Strategies, and Action Plans) is a common-sense arranging measure used to help local gatherings characterize a dream and create useful approaches to authorize a change. VMOSA helps your association set and accomplish momentary objectives while keeping sight of your drawn-out vision.\" activity arranging measure. Building up a dream and statement of purpose is pivotal to the achievement of local area activities. These statements compactly clarify your gathering's desires, help your association centre on what is truly significant, and give a premise to creating different parts of your essential arrangement. This part gives a manual for creating and actualizing your association's vision and statements of purpose. Vision: When the firm communicates its desires as an essential purpose should give unmistakable outcomes. Those outcomes will be the acknowledgment of the association's vision. Vision demonstrates a definitive motivation behind being here. For example, a few organizations might need to become world pioneers in the next 10 years. Thusly vision explains the position which a firm might want to accomplish over the long haul. It is the fantasy of the association once in a while vision and mission are utilized equivalently. Be that as it may, there is diversity between the two. The mission is worried about the present and the vision is more worried about what's to come. The statement of purpose responds to the inquiries what is our business? The vision statement offers the responses to this inquiry. The appropriate response might be \"what would we like to be?\" Vision statements sanction the essential way. It is an incredible helper to activity. Regularly it is the activity from which the vision is determined. Model. Walt Disney needed to fulfil individuals. Vision statement should be imparted to the individuals from the association. They are the person who will help in carrying our fantasy to the real world. Correspondence of vision to everybody is fundamental to accomplish an organization's drawn-out heading. The partner will make trust in their brain about the lucidity of the reason for the firm and knows where the organization needs to advance. Vision passes on the fundamental reason. It takes a clear picture in the brain of the representatives, investors, and others. It imparts inspiration among the individuals. At the 29 CU IDOL SELF LEARNING MATERIAL (SLM)

point when the vision is expressed, it shows its course wherein the association is going. It makes energy among the workers. As indicated by Peter Senge, \"A dream gives shared photos of things to come that cultivate authentic responsibility and enlistment instead of consistence\" According to Miller and Dess, Vision essentially is the \"Class of goals that are wide, comprehensive and ground-breaking\". The Advantages/Benefits of Vision  Good vision is moving and invigorating.  It explains the way where association needs to continue.  It causes the association to plan for the future.  It demonstrates top service sees about the company's long reach bearing.  It coordinates in a dynamic cycle.  It gives a base to bring down level supervisors to set departmental mission and objectives.  It makes a normal personality and a common feeling of direction.  Good vision encourage hazard taking . For benefiting these benefits the vision should go about as a hierarchical contract of basic beliefs and standards. There ought to be an assurance of what makes us interesting. A vision statement ought not to be just a 'high idea' statement or a promoting motto. Example: International Business Machines Corporation (IBM) has a vision statement and statement of purpose firmly connected with the association and its image. An association's corporate vision statement sets the ideal future condition of the business to control key bearing. IBM's corporate vision is \"to be the world's best and significant data innovation organization. Fruitful in assisting clients to apply innovation to take care of their issues. Fruitful in acquainting this phenomenal innovation with new clients. Significant, because we will keep on being the essential asset of a lot of what has put resources into this industry.\" This vision statement portrays IBM's formative way as it keeps up its situation as one of the top parts in the worldwide market. IBM's vision statement denotes the significance of authority of the business in the data innovation industry. Mission: Clarifying the statement of purpose and characterizing the business is the beginning stage of business arranging. Association characterizes the fundamental explanation behind their reality regarding a statement of purpose. Statement of purpose characterizes the job of the association in the general public. It depicts the association explanations behind being. For certain organizations, the statement of purpose might be as long statement or might be a simple passage. Statement of purpose remembers a statement for a hierarchical way of thinking and reason. It shows the major motivation behind the association. The statement of 30 CU IDOL SELF LEARNING MATERIAL (SLM)

purpose additionally incorporates the company's way of thinking about how it works together and treats its representatives. A few specialists are of the assessment that statement of purpose depicts what the association is present, and a dream statement features on what the association like to be soon. As per Thompson (1997) mission is the \"Fundamental motivation behind the association, focusing especially why it is in presence, the idea of the organizations it is in and clients it looks to serve and fulfil\" In little association, the proprietor/originator builds up the mission of the venture. In certain organizations, the CEO outlines the statement of purpose. Anyway, in the enormous association, a gathering of top supervisors is engaged with the way toward outlining a statement of purpose. Segments of a Mission Statement Statements of purpose may shift long, substance, arrangement, and particularity. Yet, most concur that a powerful statement of purpose should be sufficiently extensive to incorporate every one of the key parts. Since a statement of purpose is regularly the most noticeable and public piece of the essential service measure, it is significant that it incorporates every one of the accompanying fundamental segments: 1. Essential item or service: What are the company's signature items or services? 2. Essential business sectors: Where does the firm contend? 3. Head innovation: Is the firm innovatively current? 4. Clients: Who are the association's clients? 5. Worry for endurance, development, and benefit: Is the firm dedicated to the development and monetary sufficiency? 6. Organization theory: What are the fundamental convictions, strengths, desires, and moral needs of the firm? 7. Organization self-idea: What is the association's unmistakable capability or major upper hand? 8. Worry for the public picture: Is the firm receptive to the social, local area, and natural concerns? 9. Worry for representatives: Are businesses viewed as a significant resource of the firm? 10. Worry for quality: Is the firm dedicated to the greatest? 31 CU IDOL SELF LEARNING MATERIAL (SLM)

2.3 GOALS AND OBJECTIVES Goals A goal is an ideal future state or target that an association attempts to accomplish. Objectives indicate specifically what should be done if an association is to accomplish a mission or vision. Objectives make the mission more unmistakable and cement. They co-ordinate and coordinate different utilitarian and departmental territories in an association. Very much caused objectives to have following highlights:  These are exact and quantifiable.  These take care of basic and huge issues.  These are sensible and testing.  These should be accomplished inside a particular period.  These incorporate both monetary just as non-monetary segments. These address your drawn-out yearnings yet are more explicit and concrete than your vision statement. For instance, would you like to make X measure of deals in X measure of time? Would you like to arrive at 10,000 remarkable clients? Would you like to have a worldwide presence? Assuming this is the case, where nations would you like to open stores or workplaces? Objectives Your objectives fall under every one of your objectives and address more modest objectives to assist you with getting. Consider them venturing stones. Your goals will likewise help you measure your advancement and achievement. If you're battling to arrive at your targets over the long run, rethink what you want to achieve for the time being. It's alright to have a few chains of the importance of objectives and goals to separate them into reasonable advances. Targets are characterized as objectives that the association needs to accomplish throughout some undefined time frame. These are the establishment of preparation. Strategies are created in an association to accomplish these targets. Detailing of targets is the undertaking of high- level service. Viable objectives have the following highlights -  These are not single for an association, yet different.  Objectives ought to be both present moments just an as long haul.  Objectives should react a lot to changes in climate, i.e., they should be adaptable.  These should be possible, practical, and operational. Nature of Objectives Coming up next are the attributes of goals: 32 CU IDOL SELF LEARNING MATERIAL (SLM)

Order of Objectives In a multi-divisional firm, goals ought to be set up for the general organization too as for each division. Objectives are by and large settled at the corporate, divisional, and useful levels, and as such, they structure a progressive system. The peak of the progressive system is the mission of the association. The objectives at each level add to the goals at the following more elevated level. Long-Reach and Short-Range Objectives Associations need to set up both long-reach and short-range targets (Long-range means more than one year, and short–range implies one year and less.) Short-range objectives spell out the close–term results to be accomplished. Thusly, they show the speed and the level of performance-focused on each succeeding period. Short–range objectives can be indistinguishable from long–range goals if an association is performing at the focused on long haul level (for example, 20% development - rate each year). The main circumstance where short-range objectives differ from the long-range goals happens when directors can't arrive at the long-range focus in just one year and are attempting to lift authoritative execution. Short–range targets (one–year objectives) are the methods for accomplishing long reach objectives. An organization that has an objective of multiplying its deals inside five years can hardly wait until the third or fourth year of its five-year strategic plan. Short reach goals at that point fill in as venturing stones or achievements. Multiplicity of Objectives Associations seek after various goals. At each level in the pecking order, targets are probably going to be various. Model: The advertising division may have the goal of deals and circulation of items. This target can be separated into a gathering of objectives for the item, examination, and advancement exercises. To portray a solitary, explicit objective of an association is to say almost no regarding it. Incidentally, there are a few objectives included. This might be because of the way that the undertaking needs to meet inside just as outside challenges viably. Additionally, no single goal can put the association on a way of thriving and progress over the long haul. Be that as it may, an association ought not to set such a large number of objectives. On the off chance that it does, it will lose centre. Such a large number of goals have various issues. Models: (a) They weaken the drive for accomplishment (b) Minor objectives get featured to the impediment of significant goals there is no consent to the number of targets that a chief can adequately deal with. Yet, if there are numerous to such an extent that none gets satisfactory consideration, the execution of objectives gets incapable; there should be 33 CU IDOL SELF LEARNING MATERIAL (SLM)

mindful. It will be savvy to distinguish the overall significance of every even-handed if the rundown isn't reasonable. Organization of Objectives Notes Goals structure an interlocking organization. They are between related and between subordinates. The execution of one may affect the usage of the other. If there is no consistency between organization objectives, individuals may seek after objectives that might be useful for their capacity however impeding to the organization overall. Subsequently, targets ought \"fit\" yet additionally support one another. As seen by Koontz et al., \"it is awful enough when objectives don't support and interlock with each other. It could be calamitous when they meddle with each other.\" 2.4 STAKEHOLDERS IN BUSINESS AND THEIR ROLES A partner is an individual who has an interest in the organization, IT service, or its activities. They can be the representatives of the organization, providers, sellers, or any accomplice. They all have an interest in the association. Partners can likewise be a financial backer in the organization and their activities decide the result of the organization. Such partner assumes a significant part in characterizing the eventual fate of the organization just as its everyday operations. Kinds of Stakeholders Internal Stakeholders They are a piece of the service of the organization and have cast ballot powers. They are the significant financial backers in the organization and a piece of the directorate. Accordingly, they have every one of the forces that other more significant level service have and can alter the course of the organization. External Stakeholders In contrast to inward partners, their significant job is to put or disinvest in the organization. They barely can acquire any alter the organization's course. They don't partake in any inner tasks or dynamics of the organization. Roles of Stakeholders Direct the Management The partners can be a piece of the governing body and subsequently help in making moves. They can assume control over specific divisions like assistance, HR, or innovative work and oversee them for guaranteeing achievement. 34 CU IDOL SELF LEARNING MATERIAL (SLM)

They Bring in Money Partners are the enormous financial backers of the organization and they can whenever get or take out cash from the organization. Their choice will rely on the organization's monetary presentation. In this way, they can compress the service for monetary reports and change strategies if fundamental. A few partners can even increment or abatement the venture to change the offer cost on the lookout and along these lines make the conditions ideal for them. Help in Decision Making Significant partners are essential for the governing body. Consequently, they additionally take choices alongside other board individuals. They can disturb the choices too. They and bring in more thoughts and undermine the service to submit to them. The partners likewise have every one of the forces to choose senior-level service. Subsequently, they are there taking all things together in the significant dynamic zones. They likewise take choices in regard to liquidations and acquisitions. Corporate Conscience Enormous partners are the significant partners of the organization and have checked over every one of the significant exercises of the organization. They can cause the organization to submit to basic freedoms and ecological laws. They additionally screen the re-evaluating exercises and may cast a ballot against any business choice on the off chance that it hurts the drawn-out objectives of the organization. Other Responsibilities Aside from the over four significant jobs they likewise have some different tasks to carry out in the organization. They can distinguish new territories for market infiltration and expanded deals. They can get additional promoting thoughts. They likewise draw in different financial backers like bumblebees in the organization. They can be a piece of a choice board or a delegate for the organization. Also, they can take every one of the significant social and ecological choices. 2.5 SUMMARY  Strategic purpose contains an ability to know east from west, a feeling of finding that will help in recognizing freedoms to address new difficulties, and a feeling of 35 CU IDOL SELF LEARNING MATERIAL (SLM)

predetermination that will make motivation and responsibility concerning directors, representatives, and the partners.  Strategic expectation specifies 'stretch' it implies extending the current assets and abilities to accomplish the ideal objectives. The idea of key goals includes the utilization of asset stretch.  Vision passes on the essential reason. It takes a striking picture in the brain of the representatives, investors, and others. It ingrains energy among individuals. At the point when the vision is expressed, it demonstrates its course wherein the association is going. It makes energy among the representatives.  Business can be characterized under three elements of client gatherings, client capacities, and options advances.  Corporate vision is a short, compact, and rousing statement of what the association means to become and to accomplish sooner or later, frequently expressed in competitive terms.  A mission can be characterized as a sentence portraying an organization's capacity, markets, and competitive benefits.  Developing your statement of purpose is the progression that moves your key planning process from the present to what is to come.  The mission ought to be adequately expansive to consider the variety (new items, new services, new markets) one needs for one's business.  The statement of purpose ought to likewise be adequately explicit to give the central importance to the success of your business.  Once a statement of purpose has been set, each association needs to intermittently audit and perhaps reconsider it to ensure it precisely mirrors its objectives and the business and economic environments advance.  Business model can be characterized as 'a portrayal of a company's basic centre rationale and key decisions for making and catching an incentive inside a VALUE organization'.  Internal partners are key service of the organization and hence should be considered true. They have their privileges and obligations; hence, they are of most extreme significance for the better eventual fate of the organization. They should likewise play their jobs truly and run after their improvement. 2.6 KEYWORDS Objectives: It is an open-finished explanation of what one needs to accomplish with no evaluation of outcomes or time limit. Mission: An explanation that pronounces what business an organization is in and who its clients are. 36 CU IDOL SELF LEARNING MATERIAL (SLM)

Goals: The outcomes an association needs to accomplish in seeking after its fundamental mission. Vision: The general objective of an association that all business exercises and cycles should contribute toward accomplishing. Useful Strategy: Involves choices about every unit of the association. 2.7 LEARNING ACTIVITY Mission MindTree MindTree was established in 1999 in India by a gathering of IT experts who needed to diagram a fairly particular way. Today, it has a top line of $269millions and is appraised as quite possibly the most encouraging average-sized IT service organizations. Noteworthy as that is, MindTree would not like to be only that. There is a component of good fortune about the thing it has been doing throughout the most recent year. In 2008, it assigned one of its originators Subroto Bagchi 'Grounds-keeper', a gimmicky sign, expected to proclaim that he was moving out of the everyday running of the organization to support ability which would run the organization later on. He has now a report card prepared for a year as Gardener. During this one year, he has additionally gone through around 45 days going around the planet conversing with customers and imminent ones which have yielded astounding experiences into what firms are doing on these awful occasions. Finally, MindTree overall has spent the most recent year going through the activity of rethinking its statement of purpose and vision for the following five years. Randomly these three cycles have met up with a bringing together string, introducing a sound large picture. MindTree needs to seed the future while still youthful, and chief director Ashok Soot has announced that by 2020, it will be driven by a non-originator. So, a year prior the Gardener Bagchi set out to \"contact\" 100 best individuals in the association, to do 50 of a year to ultimately distinguish the best 20 by 2015. From among them will arise the pioneer as well as a group of ten who might ultimately, as gather heads, convey $200millions of turnover each? That will give a turnover of $2 billion. To place it in context, just a single VC-financed organization, which has not shut or been purchased over, has had the option to get to $2 billion and that is Google. However, to arrive it needs to intermittently reclassify its central goal (why we exist) and its vision - quantifiable objectives for the following five years. Its re-imagined mission is worked around \"fruitful clients, glad individuals, and creative arrangements\". Its new vision focuses on a turnover of $1billion by 2014. It needs to be among the worldwide 20 most beneficial IT service organizations and the 20 universally most respected ones. Respected regarding consumer loyalty (good enough), individuals rehearse (noteworthy), information management (exciting), and corporate service (the Enron-Satyam impact). The truly intriguing piece about MindTree with regards to the most recent year is the thing that Bagchi has been doing. He has been implanting himself in the 50 lives, working in an individual 37 CU IDOL SELF LEARNING MATERIAL (SLM)

private continuum, making it a rich learning measure \"which has associated such countless dabs.\" Of the hundred who will be locked in, possibly 50 will leave, of them, 25 may better themselves just imperceptibly, and from the leftover 25 ten will arise who will convey the organization forward. Source: www.businesss-standard.com Questions 1. What do you think the key reason for Mindtree's popularity is? ………………………………………………………………………….................................. …………………………………………………………………………….................................. 2. Do you believe that redefining a mission statement reveals flaws in an organization's founding members? Why do you think that is? ……….................................……………………………………………………………………. ……………………………….................................……………………………………………. 2.8 UNIT END QUESTIONS A. Descriptive 38 Short Questions 1. Discuss the Importance of Strategic Management. 2. Elaborate Vision, Mission, and Objectives. What is a key achievement factor? 3. What is the segment climate of business? 4. Explain Stakeholders and sorts of partners. 5. Discuss Goals and targets. B. Long Questions 1. Discuss Importance of Strategic Management. 2. What is External Strategic Analysis? 3. What is Internal Strategic Analysis? 4. What is Crafting a Strategic Intent Statement? 5. What are the developmental stages of international marketing? C. Multiple Choice Questions 1. The three organizational levels are: a. Corporate level, business level, functional level b. Corporate level, business unit level, functional level CU IDOL SELF LEARNING MATERIAL (SLM)

c. Corporate strategy level, business unit level, functional level d. Corporate strategy level, business level, specialist level 2. The goal of the organization’s__________ is to capture the hearts and minds of employees, challenge them, and evoke their emotions and dreams. a. Vision b. Mission c. Culture d. Strategy 3) A firm’s mission __________. a. Is a statement of a firm’s business in which it intends to compete and the customers who it intends to serve? b. Is an internally focused affirmation of the organization’s financial, social, and ethical goals? c. Is mainly intended to emotionally inspire employees and other stakeholders. d. Is developed by a firm before the firm develops its vision. 4) The fundamental purpose for the existence of any organization is described by its __________. a. Policies b. Mission c. Procedures d. Strategy 5) The fundamental purpose of an organization’s mission statement is to __________. a. Create a good human relations climate in the organization b. Define the organization’s purpose in society c. Define the operational structure of the organization d. Generate good public relations for the organization Answers: 1.a, 2 a, 3 d, 4 b, 5 b 2.9 REFERENCES Textbooks  Rao Subba P;Business Policy and Strategic Management: Text and Cases; Himalaya Publication House , New Delhi. 39 CU IDOL SELF LEARNING MATERIAL (SLM)

 Fred R. David Francis, Strategic Management CONCEPTS AND CASES ,“Marion University Florence, South Carolina”.  A Thompson and AJ. Strickland, 1984, Strategic Management, Business Publications, Texas.  Pearce JA and Robinson RB, 2000, Strategic Management, McGraw Hill, NY.  Fred R. David, 2005, Strategic Management – Concepts and Cases, Pearson Education Inc.  Ian Palmer, Richard Dunford and Gib Akin, 1957, Managing Organisational Change, Tata McGraw-Hill, New Delhi. Reference Books  R. Srinivasana, (2014).Strategic Management, Prentice Hall India Pvt Ltd, Fifth edition.  Haberberg & Rieple, , (July 2008).Strategic Management – Theory and Application, Oxford. Websites  https://www.businessmanagementideas.com/strategic-management  https://www.toolshero.com/strategy  https://www.investopedia.com/terms/s/synergy.asp 40 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT- 3 INTERNAL ANALYSIS Structure 3.0. Learning Objectives 3.1. Introduction 3.2. Organizational Capabilities in various Functional Areas 3.2.1. Strategic Advantage Profile 3.3. Value Chain Analysis 3.3.1. Value Chain Activity 3.4. Industry Standards and Benchmarking 3.4.1. Benchmarking Approach 3.5. Summary 3.6. Keywords 3.7. Learning Activity 3.8. Unit End Questions 3.9. References 3.0 LEARNING OBJECTIVES After studying this unit, the student will be able to:  Explain organizational capacities.  Describe value chain analysis and action.  Illustrate benchmarking and way to deal with benchmarking. 3.1 INTRODUCTION The inner climate is the climate that straightforwardly affects the business. Here some inner elements are for the most part controllable because the organization has command over these elements. It can change or alter such factors as its workforce, actual offices, and association and utilitarian methods, such as showcasing, to suit the climate. The significant inside factors which have a direction on the technique and different choices of the interior association are examined beneath.  Value Framework The value arrangement of the originators and those at the controls of undertakings have a significant bearing on the decision of business, the mission and the goals of the association, business strategies, and practices. 41 CU IDOL SELF LEARNING MATERIAL (SLM)

 Mission and Vision and Objectives Vision implies the capacity to consider the future with a creative mind and insight. Vision is a significant factor in accomplishing the goals of the association. The mission is the medium through which the objectives are accomplished.  Management Design and Nature The design of the association additionally impacts the business choices. The authoritative design like the structure of governing body impacts the choices of business as they are inside factors. The design and style of the association may defer a dynamic or some different aides in settling on snappy choices.  Internal Force Connections The relationship among the three levels of the association additionally impacts the business. The common co-appointment among those three is a significant requirement for a business. The relationship among individuals working in the three levels of the association ought to be welcoming.  Human Asset The human asset is a significant factor for any association as it adds to the strength and weakness of any association. The human asset in any association should have attributes like abilities, quality, high spirit, responsibility towards the work, mentality, and so forth the inclusion and activity of individuals in an association at various levels may change from one association to another. The hierarchical culture and in general climate have bearing on them.  Company Picture and Brand Value The picture of the organization in the external market affects the interior climate of the organization. It helps in raising the money, making joint endeavours, different unions, developments, and acquisitions, entering deal and buy contracts, dispatching new items, and so on Brand value additionally helps the organization in the same manner.  Miscellaneous Factors Different variables that add to the business achievement or disappointment are as per the following: i. Physical Resources and Offices Actual Assets and offices like creation limit, innovation is among the components which impact the seriousness of the firm. The appropriate working of the resources is 42 CU IDOL SELF LEARNING MATERIAL (SLM)

to be sure with the expectation of complimentary progression of working of the organization. ii. Research and Improvement Even though Research and advancement division is fundamentally done through outer climate, yet it straightforwardly affects the association. These perspectives chiefly decide the organization's capacity to enhance and contend with the contenders. iii. Marketing Assets In an association, the nature of the labour in promoting, brand value, and in appropriation network has a direct bearing on showcasing productivity of the organization. iv. Financial Factors Elements like monetary arrangements, monetary positions, and capital design are additionally significant inward climates influencing business exhibitions, procedures, and choices. 3.2 ORGANIZATIONAL CAPABILITIES IN VARIOUS FUNCTIONAL AREAS Association's capacities lie in its assets. The assets are the methods by which an association creates value. It is this value that is then circulated for different purposes. The assets and abilities of a firm can be best clarified with the assistance of the Resource-Based View (RBV) of a firm which is advocated by Barney. RBV thinks about the firm as a heap of assets – substantial assets, elusive assets, and hierarchical abilities. The upper hand, as per this view, by and large emerges from the production of packs of unmistakable assets and abilities. An 'asset' can be a resource, expertise, interaction, or information constrained by an association. From an essential point of view, an association's assets incorporate both those that are claimed by the association and those that can be gotten to by the association to help its systems. Some deliberately significant assets might be outside the association's possession, like its organization of contacts or clients. Normally, assets can be gathered into four classifications:  Actual assets incorporate plant and apparatus, land and structures, creation limit, and so on.  Monetary assets incorporate capital, money, borrowers, banks, and so on.  HR incorporates information, abilities, and flexibility of HR. 43 CU IDOL SELF LEARNING MATERIAL (SLM)

 Scholarly capital is an immaterial asset of an association. This incorporates the information that has been caught in-licenses, brands, business frameworks, client data sets, and associations with accomplices. In an information-based economy, scholarly capital is probably going to be the significant resource of numerous associations. Assets are not exceptionally beneficial all alone. They need authoritative abilities. Authoritative abilities are the abilities that a firm utilizes to change contributions to yields. They mirror the capacity of the firm in joining resources, individuals, and cycles to achieve the ideal outcomes. Prahalad and Hamel depict hierarchical fitness as a \"heap of abilities and innovations\", which are incorporated in relationship-building abilities and business measures. Abilities are, subsequently a component of the company's assets, their application and association, inner frameworks and cycles, and firm explicit ranges of abilities. Capacities are seldom exceptional and can be obtained by different firms also in that industry. A portion of these abilities may become \"unmistakable skills\" when a firm performs them better than its adversaries. A capacity is a progression of related exercises, including at least one element, performed for the direct, or roundabout, the reason for satisfying at least one missions or objectives of the firm, creating income for the firm, adjusting the clients of the firm, delivering the items and services of the firm, or overseeing, controlling, observing, recording, or providing details regarding the exercises, states, or states of the substances of the firm. A capacity is a progression of related exercises, including at least one element, performed for the direct, or backhanded, the reason for satisfying at least one missions or goals of the firm, creating income for the firm, adjusting the clients of the firm, delivering the items and services of the firm, or overseeing, managing, checking, recording, or giving an account of the exercises, states, or states of the elements of the firm. Function might be:  Be a significant territory of control or a significant movement of the firm.  Be made out of at least one sub functions.  Be acted in one territory or numerous territories.  Be performed by an individual, a gathering of people, gatherings of people, regions of the firm, or the actual firm.  Involve at least one particular, reliant or free activity.  Be recognized and characterized without being performed If a capacity is acted in various territories, those zones could conceivably be connected in either an authoritative or announcing sense. A capacity is regularly contracted to perform at least one related exercise. These exercises are generally related because they work on regular 44 CU IDOL SELF LEARNING MATERIAL (SLM)

information substances or because the exercises are successive or resemble and perform related work to a typical end. By and large, firms are coordinated along work lines, in that every vertical authoritative gathering plays out something similar or related arrangement of exercises and is dependable to a solitary control point. Capacities might be gathered into super functions that meet up at high hierarchical levels. Two Categories of Business Functions The elements of any firm, regardless of whether it is assembling, account, or service firm, can be fragmented into two general classifications (Figure 3.1). Every one of the different elements of the firm can be appointed to either of these classifications and now and again, a capacity might be allocated in the two classifications. Figure 3.1: Two Categories of Business Functions Business Category Capacities in this classification comprise of those exercises which are straightforwardly associated with delivering the items, offering the types of assistance, producing the incomes and the benefits of the firm, or dealing with those territories. This classification has been named the operational territory of the firm. The capacities in this classification have additionally been named line capacities. Managerial, Backing, or Overhead Category 45 CU IDOL SELF LEARNING MATERIAL (SLM)

This class contains those capacities that service the firm as a lawful substance and accommodate its day-to-day prosperity. The regulatory classification ordinarily contains capacities like staff, structures and support, chief service, general bookkeeping; and so, on these capacities have been named staff capacities. Business Function Analysis Every client work portrayal ought to be joined by an outline of the business archives or exchanges that are a contribution to the client capacity and which thusly drive that work. Tests of each information structure ought to incorporate structure information component portrayals of the data on the structure that is as of now utilized by the firm; data that may be of possible use to the firm sometime in the not-too-distant future ought to likewise be incorporated, alongside the info depictions. The investigator ought to set up a useful portrayal for each capacity tended to. This practical depiction ought to be written in the client, i.e., business, terms, and ought to exclude any information handling language or phrasing. The objective of this stage is to put the client support in context inside their particular business region and the general corporate business utilitarian structure. Again, it ought to be focused on that the language of the record ought to be in the client and hence in business, terms. The extent of the issue, the timeframe the issue has existed, and any endeavours which have been made to redress the issue ought to likewise be recorded. 3.2.1 Strategic Advantage Profile Each firm has key benefits and disadvantages.  For model, huge firms have monetary strength however they will in general move gradually, contrasted with more modest firms, and regularly can't respond to changes rapidly.  No firm is similarly solid on the whole of its capacities. All in all, every firm has strengths just as weaknesses.  The Strategist should hope to check whether the firm is more grounded in these elements than its rivals.  When a firm is solid on the lookout, it has an essential benefit in dispatching new items or benefits and expanding pieces of the pie of present items and services. Key Advantage Factors: Marketing and Distribution  Serious design and piece of the pie: To what degree has the firm settled a solid imprint share in the absolute market or its key sub-business sectors?  Proficient and viable statistical surveying framework. 46 CU IDOL SELF LEARNING MATERIAL (SLM)

 The item service blend: nature of items and services.  Item service line: the culmination of item service line and item service blend; period of life cycles the primary products and services are in.  Solid new-item and new-service initiative.  Patent insurance (or identical legitimate assurance for services).  Good sentiments about the firm and its items and services on the piece of a definitive customer. Vital Advantage Factors: R&D and Engineering  Fundamental examination abilities inside the firm.  Improvement capacity for an item.  Greatness in item plan.  Greatness in measure plan and upgrades.  Unrivalled bundling improvements being made.  Upgrades in the utilization of old or new materials.  Capacity to meet plan objectives and client prerequisites.  Exceptional research centres and testing offices.  Prepared and experienced specialists and researchers.  Workplace fit to innovativeness and advancement. 3.3 VALUE CHAIN ANALYSIS Value Chain Analysis is the structure most regularly used to direct the analysis of any company's strengths and weaknesses. In this structure, any business is viewed as various connected exercises, each delivering an incentive for the client. By making extra value, the firm may charge more or can convey the same incentive at a lower cost, both of this prompting higher overall revenue. This eventually adds to the association's monetary presentation. This idea is valuable for getting the upper hand moreover. The value chain examination framework is quite possibly the main Strategic Management Model for breaking down an organization's circumstance. Value chain examination in essential service is embraced to assess an organization's Value chain components. Value chain analysis recognizes every component of the association's Value chain's strengths and weaknesses. It can't be utilized to distinguish outer freedoms and threats. The idea of significant value chain analysis has been spellbound by Michael Porter (his most well-known five powers model). He has named it a valuable apparatus for breaking down a specialty unit and surveying the unit's abilities. The value chain analysis makes accessible a disaggregated perspective on a firm. At the point when you have a disaggregated perspective on your firm, you can analyse the company's strengths and weaknesses for every component of the association's value chain. Michael Porter's Value chain examination is a precise 47 CU IDOL SELF LEARNING MATERIAL (SLM)

method of assessing the arrangement of exercises a firm performs to give an item to its clients. Each manufacturing plant can be looked like an assortment of significant value occasions that are executed to create, plan, market, and convey its exercises. The value chain of a firm comprises the association's essential and backing exercises. A company's value chain characters the essential exercises that make an incentive for clients and the connected help exercises that upgrade essential exercises' presentation. In an assembling firm, the chain of significant value making exercises begins with the acquisition of crude materials. It proceeds through assembling, gathering, discount dissemination, and retailing to definitive end-clients of the item or service. 3.3.1 Value Chain Action Essential Activities in Value Chain Analysis The value chain examination's essential exercises are associated with the actual making of an item, its appropriation and advertising, and the after-deals service identified with the item. The essential exercises are inbound logistic, tasks/creation, outbound logistic, advertising, and services. For example,  Inbound logistic are those that are related to accepting, putting away, and taking care of contributions to the creative interaction. These incorporate material taking care of; putting away items in the stockroom, planning vehicles for the vehicle of materials/items, and gets back to providers.  Operations involve bundling, machining, testing, hardware support, get-together, and different exercises related to changing contributions to definitive items. This is the actual interaction of making, testing, and bundling the item.  Outbound logistics are those performed to gather, store, and convey items to clients. Material dealing with, conveyance vehicles, request preparing, and booking are remembered for outbound logistics.  Marketing is a component of essential exercises in value chain analysis. It is worried about giving the purchaser data, instigation, and freedoms to purchase the item. It incorporates special exercises like publicizing, deals advancement, advertising, individual selling, sales force, determination of conveyance channel, evaluating of items, and different exercises identified with giving methods by which clients can purchase the items.  Service worries about exercises related to upgrading and keeping up the items' incentive to clients, as a fix of machines, the establishment of hardware, preparing to client's inventory of parts, brief reaction to client's inquiry, and so forth all these essential exercises are available in fluctuating degrees in each firm and, hence, merit consideration in the company's inward examination. 48 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 3.2: Value Chain in Strategic Management Steady Activities in Value Chain Analysis The help exercises in the value chain analysis are fundamental for supporting the essential exercises to occur. The help exercises in the value chain analysis have markers. For example,  Firm's Framework.  Human asset the Executives.  Technological Improvement.  Procurement of assets, account, stock, and so forth. Altogether, all these help exercises, and essential exercises make the value chain. The chain includes an income edge because a mark-up over the expense of permitting value-making exercises is usually important for the cost borne by purchasers. 3.4 INDUSTRY STANDARDS AND BENCHMARKING Benchmarking is a procedure device used to look at the presentation of the business cycles and items with the best exhibitions of different organizations inside and outside the industry. It is the quest for industry best practices that lead to prevalent execution. There are various kinds of benchmarking the supervisors can utilize. Tuominen and Bogan and English recognized these 3 significant sorts:  Strategic Benchmarking: Administrators utilize this sort of benchmarking to distinguish the most ideal approach to contend on the lookout. During the interaction, 49 CU IDOL SELF LEARNING MATERIAL (SLM)

the organizations recognize the triumphant systems (typically outside their industry) that effective organizations utilize and apply them to their essential cycle. It is additionally basic to contrast the essential objectives all together with spot new essential decisions.  Performance Benchmarking: It is worried about contrasting your organization's items and services. As indicated by Bogan and English[8] the instrument for the most part centres around the item and service quality, highlights, value, speed, dependability, plan, and consumer loyalty, yet it can quantify whatever has the quantifiable measurements, including measures. Execution benchmarking decides how solid our items and services are contrasted with our opposition.  Process Benchmarking: It needs to take a gander at different organizations that participate in comparative exercises and to distinguish the prescribed procedures that can be applied to your cycles to improve them. Cycle benchmarking is a different sort of benchmarking; however, it normally gets from execution benchmarking. This is because organizations initially distinguish the frail contending points of their items or services and afterward centre on the critical cycles to kill those weaknesses. For instance, an association utilizing execution correlation distinguishes that their item 'X' is unrivalled in highlights, fabricating quality and plan, yet pricier than contender's item 'Y'. At that point, the organization decides, which cycles add the most to the expense of the item and look for how to improve them by taking a gander at comparable, however less expense hefty cycles in different organizations. 3.4.1 Benchmarking Approach There are four different ways you can do benchmarking. It is imperative to pick the ideal way since it decreases the expenses of the movement and improves the odds to track down 'all that principles' you can depend on. Interior Benchmarking: In enormous associations, which work in various geographic areas or oversee numerous items and services, the same capacities and cycles are normally performed by various groups, specialty units, or divisions. This frequently brings about measures performed very well in one division however inadequately in another. Interior benchmarking is utilized to think about crafted by isolated groups, units, or divisions to recognize the ones that are working better and offer the information all through the organization to different groups to accomplish better. It is generally utilized by the organizations that have as of late extended topographically, however haven't yet made appropriate information dividing frameworks among divisions. If such frameworks are set up, there's no compelling reason to utilize interior benchmarking to search for best practices. External or Competitive Benchmarking: A few creators utilize these terms reciprocally yet there are a couple of contrasts between them. In the first place, serious benchmarking alludes to a cycle when an organization contrasts itself and the contenders inside its industry. Though 50 CU IDOL SELF LEARNING MATERIAL (SLM)