CHANGES AFTER LIBERALISATION

Opportunities 1. Entry into business has become easier than what it used to be in pre-liberalised era which was marked by industrial licensing and several types of clearances from various government agencies. 2. Liberalization has eased the process of business restructuring either by way of divesting some business by an organization or acquiring other businesses. 3. Liberalization has opened the path to private-sector organizations for the participation in management of public-sector companies through acquisition of majority or controlling shareholding as the government has adopted the policy of disinvestment. 4. Liberalization has paved the way for acquiring businesses abroad which adds to competitive advantages to the acquiring companies. 5. Post-liberalisation, raising of funds has become much easier because of fewer restrictions on this process. Threats 1. Liberalization has posed a kind of competition with which Indian companies have not confronted in the past. 2. Entry of many new players in business field has posed acute pressure on productive resources, both human and non-human. 3. Foreign Institutional Investors (FIIs), sometimes, interfere with the management process of companies in which these FIIs have substantial shareholdings through stock market operations. 4. With the increased limit of FIIs holding up to 49 percent, there may be threat of takeover of companies because promoters will not have controlling stake in share holding.

IDENTIFICATION OF STRENGTH & WEAKNESS

Strengths and weakness in production/operations Strengths 1. Well-balanced allocation and use of resources 2. Favourable locational pattern of plants and offices 3. Adequate use of production capacity 4. Low cost of production 5. Low break-even point 6. Efficient procedures 7. Abundant and multi sources of raw materials supply 8. Effective system 9. Adequate and effective inventory control 7. Scarce and limited sources of raw materials supply 8. Ineffective system 9. Inadequate and ineffective inventory control and effective Weaknesses 1. Defective allocation and use of resources 2. Unfavourable locational pattern of plants and offices 3. Inadequate use of production capacity 4. High cost of production 5. High break-even point 6. Ineffective procedures

research and development 10. Holding of well-established

research and development 10. No patent right

patent right

Strengths and weakness in Marketing Strengths 1. Favourable company image 2. Diversified product-mix 3. High market share 4. Growing or maturing stage of product life cycle 5. Effective and efficient 5. Ineffective distribution channel Weaknesses 1. Poor company image 2. Single or limited product 3. Low market share 4. Declining product life cycle

distribution channel 6. Efficient and motivated sales force with contacts with large number of customers 7. Efficient promotional efforts and proper product 7. Lack of promotional efforts 6. Inefficient sales force with

limited contact with customers

positioning 8. Efficient marketing research and feedback system 9. Pricing commensurate with 8. Defective research 9. Pricing unrelated to product and market features 10. Stagnant marketing strategy or no marketing

product and market features 10. Review and updating of

marketing strategy

Strengths and weakness in Finance Strengths 1. Low capital cost 2. Sound capital structure Weaknesses 1. High capital cost 2. Defective structure 3. Sound financial planning and proper capitalization 4. Advantages concessions 5. Widely shareholding 6. Cordial relations with 6. Lack of cordial relations with shareholders and financiers 7. Lack of proper accounting distributed 5. Shareholding in a few hands of tax 3. Bad financial planning either over or undercapitalization 4. High incidence of taxes and rigid capital

shareholders and financiers 7. Efficient accounting procedures and effective and

systems

systems and procedures

Strengths and weakness in Human Resources Area Strengths 1. Highly skilled personnel 2. High learnability 3. Favourable change 4. High motivation and morale 5. High personnel retention 6. Low personnel absenteeism 7. Effective industrial relations attitudes to Weaknesses 1. Low skilled personnel 2. Low learnability 3. Unfavourable change 4. Low motivation and morale 5. High personnel turnover 6. High personnel absenteeism 7. Ineffective industrial relations attitudes to

Strengths and weakness in General Management Strengths 1. Transformational leadership 2. Future-oriented management 3. High organizational image to Weaknesses 1. Transactional leadership 2. Present-oriented management 3. Low organizational image and prestige 4. Low organizational climate to

and prestige 4. Sound organizational climate based on mutual trust and respect 5. Sound and suitable

based on authoritarian culture and mutual suspicion 5. Ineffective practices 6. Lack of well-defined or illmanagement

management practices 6. Suitable structure external demands 7. Well-maintained relationships external organization consistent and with

defined organization structure

internal

7. Lack of external relationships

FORCES SHAPING COMPETITION

Potential entrants

Threats of entry

Industry Competitors Braining power of buyers Buyers

Braining power Suppliers of suppliers Rivalry among competitors

Threat of substitute product Substitutes