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CHAPTER 1: Introduction to strategic Management

Strategic management analyzes the major initiatives taken by a company's top management on
behalf of owners, involving resources and performance in external environments.
[1]
It entails
specifying the organization's mission, vision and objectives, developing policies and plans, often
in terms of projects and programs, which are designed to achieve these objectives, and then
allocating resources to implement the policies and plans, projects and programs. A balanced
scorecard is often used to evaluate the overall performance of thebusiness and its progress
towards objectives. Recent studies and leading management theorists have advocated that
strategy needs to start with stakeholders expectations and use a modified balanced scorecard
which includes all stakeholders. Strategic Management is all about identification and description
of the strategies that managers can carry so as to achieve better performance and a competitive
advantage for their organization. An organization is said to have competitive advantage if its
profitability is higher than the average profitability for all companies in its industry ..
Strategic management is a continuous process that evaluates and controls the business and the
industries in which an organization is involved; evaluates its competitors and sets goals and
strategies to meet all existing and potential competitors; and then reevaluates strategies on a
regular basis to determine how it has been implemented and whether it was successful or does it
needs replacement.
Strategic Management gives a broader perspective to the employees of an organization and they
can better understand how their jobfits into the entire organizational plan and how it is co-related
to other organizational members. It is nothing but the art of managing employees in a manner
which maximizes the ability of achieving business objectives. The employees become more
trustworthy, more committed and more satisfied as they can co-relate themselves very well with
each organizational task. They can understand the reaction of environmental changes on the
organization and the probable response of the organization with the help of strategic
management. Thus the employees can judge the impact of such changes on their own job and can
effectively face the changes. The managers and employees must do appropriate things in
appropriate manner. They need to be both effective as well as efficient.One of the major role of
strategic management is to incorporate various functional areas of the organization completely,
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as well as, to ensure these functional areas harmonize and get together well. Another role of
strategic management is to keep a continuous eye on the goals and objectives of the organization.
1.1 Strategic Management Process:
The strategic management process means defining the organizations strategy. It is also defined
as the process by which managers make a choice of a set of strategies for the organization that
will enable it to achieve better performance. Strategic management is a continuous process that
appraises the business and industries in which the organization is involved; appraises its
competitors; and fixes goals to meet all the present and future competitors and then reassesses
each strategy.
Strategic management process has following four steps:




Environmental Scanning- Environmental scanning refers to a process of collecting,
scrutinizing and providing information for strategic purposes. It helps in analyzing the
internal and external factors influencing an organization. After executing the environmental
analysis process, management should evaluate it on a continuous basis and strive to
improve it.
Strategy Formulation- Strategy formulation is the process of deciding best course of action
for accomplishing organizational objectives and hence achieving organizational purpose.
After conducting environment scanning, managers formulate corporate, business and
functional strategies.
Strategy Implementation- Strategy implementation implies making the strategy work as
intended or putting the organizations chosen strategy into action. Strategy implementation
includes designing the organizations structure, distributing resources, developing decision
making process, and managing human resources.
Strategy Evaluation- Strategy evaluation is the final step of strategy management process.
The key strategy evaluation activities are: appraising internal and external factors that are

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the root of present strategies, measuring performance, and taking remedial / corrective
actions. Evaluation makes sure that the organizational strategy as well as its
implementation meets the organizational objectives.

These components are steps that are carried, in chronological order, when creating a new
strategic management plan. Present businesses that have already created a strategic
management plan will revert to these steps as per the situations requirement, so as to make
essential changes. Strategic management is an ongoing process. Therefore, it must be
realized that each component interacts with the other components and that this interaction
often happens in chorus.

1.2 Characteristics of Strategic Management:
The characteristics of Strategic Management are:
1. Uncertain: Strategic management deals with future-oriented non-routine situation. They
create uncertainly. Managers are unaware about the consequences of their decisions.
2. Complex: Uncertainly brings complexity for strategic management. Managers face
environment which is difficult to comprehend. External and internal environment is
analyzed.
3. Organization wide: Strategic management has organization wide implication.It is
not operation specific. It is a systems approach. It involves strategic choice.
4. Fundamental: Strategic management is fundamental for improving the long-term
performance of the organization.
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5. Long-term implication: Strategic management is not concerned with day-to-
day operation. It has long-term implications. It deals with vision, mission and objective.
6. Implication: Strategic management ensures that strategic is put into action,
implementation is done through action plans.
1.3 The Advantages of Strategic Management:
The advantages of strategic management are:
1.Discharges Board Responsibility:
The first reason that most organizations state for having a strategic management process is
that it discharges the responsibility of the Board of Directors.
2.Forces An Objective Assessment:
Strategic management provides a discipline that enables the board and senior management
to actually take a step back from the day-to-day business to think about the future of the
organization. Without this discipline, the organization can become solely consumed with
working through the next issue or problem without consideration of the larger picture.
3.Provides a Framework For Decision-Making:
Strategy provides a framework within which all staff can make day-to-day operational
decisions and understand that those decisions are all moving the organization in a single
direction. It is not possible (nor realistic or appropriate) for the board to know all the
decisions the executive director will have to make, nor is it possible (nor realistic or
practical) for the executive director to know all the decisions the staff will make. Strategy
provides a vision of the future, confirms the purpose and values of an organization, sets
objectives, clarifies threats and opportunities, determines methods to leverage strengths,
and mitigate weaknesses (at a minimum). As such, it sets a framework and clear boundaries
within which decisions can be made. The cumulative effect of these decisions (which can
add up to thousands over the year) can have a significant impact on the success of the
organization. Providing a framework within which the executive director and staff can
make these decisions helps them better focus their efforts on those things that will best
support the organization's success.
4.Supports Understanding & Buy-In:
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Allowing the board and staff participation in the strategic discussion enables them to better
understand the direction, why that direction was chosen, and the associated benefits. For
some people simply knowing is enough; for many people, to gain their full support requires
them to understand.
5.Enables Measurement of Progress:
A strategic management process forces an organization to set objectives and measures of
success. The setting of measures of success requires that the organization first determine
what is critical to its ongoing success and then forces the establishment of objectives and
keeps these critical measures in front of the board and senior management.
6.Provides an Organizational Perspective:
Addressing operational issues rarely looks at the whole organization and the
interrelatedness of its varying components. Strategic management takes an organizational
perspective and looks at all the components and the interrelationship between those
components in order to develop a strategy that is optimal for the whole organization and
not a single component.
1.4 The Disadvantages of Strategic Management
1.The Future Doesn't Unfold As Anticipated:
One of the major criticisms of strategic management is that it requires the organization to
anticipate the future environment in order to develop plans, and as we all know, predicting
the future is not an easy undertaking. The belief being that if the future does not unfold as
anticipated then it may invalidate the strategy taken. Recent research conducted in the
private sector has demonstrated that organizations that use planning process achieve better
performance than those organizations who don't plan - regardless of whether they actually
achieved their intended objective. In addition, there are a variety of approaches to strategic
planning that are not as dependent upon the prediction of the future.
2.It Can Be Expensive:
There is no doubt that in the not-for-profit sector there are many organizations that cannot
afford to hire an external consultant to help them develop their strategy. Today there are
many volunteers that can help smaller organizations and also funding agencies that will
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support the cost of hiring external consultants in developing a strategy. Regardless, it is
important to ensure that the implementation of a strategic management process is consistent
with the needs of the organization, and that appropriate controls are implemented to allow
the cost/benefit discussion to be undertaken, prior to the implementation of a strategic
management process.
3.Long Term Benefit vs. Immediate Results:
Strategic management processes are designed to provide an organization with long-term
benefits. If you are looking at the strategic management process to address an immediate
crisis within your organization, it won't. It always makes sense to address the immediate
crises prior to allocating resources (time, money, people, opportunity, cost) to the strategic
management process.
4.Impedes Flexibility:
When you undertake a strategic management process, it will result in the organization
saying "no" to some of the opportunities that may be available. This inability to choose all
of the opportunities presented to an organization is sometimes frustrating. In addition, some
organizations develop a strategic management process that become excessively formal.
Processes that become this "established" lack innovation and creativity and can stifle the
ability of the organization to develop creative strategies. In this scenario, the strategic
management process has become the very tool that now inhibits the organization's ability to
change and adapt. A third way that flexibility can be impeded is through a well-executed
alignment and integration of the strategy within the organization. An organization that is
well aligned with its strategy has addressed its structure, board, staffing, and performance
and reward systems. This alignment ensures that the whole organization is pulling in the
right direction, but can inhibit the organization's adaptability. Again, there are a variety of
newer approaches to strategy development used in the private sector (they haven't been
widely accepted in the not-for-profit sector yet) that build strategy and address the issues of
organizational adaptability.

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CHAPTER 2: Introduction to case study:
Case study method was first developed by Christopher Langdell in 1871 at Harved law school to
make the student to learn themselves by independent thinking and about a problem or situation .
The problem or situation may be real or hypothetical. The essence of the students role in case of
analysis is to diagonasis and to understand the situation desc ribed in the case and then to
recommend appropriate solution or action plan.A student cannot learn the art of management
only through textbook knowledge . Each managerial situation has unique aspects , requiring its
own diagnosis , judgment and specific action. Case study method provides the students an
opportunity to practice with the actual problems faced by managers in a real work environment.
The main objectives of case study are:
1) To train participants to work out answers and solutions themselves instead of replying on
others.
2) To enable the students to be active participants in the learning exercise rather than
passive receivers of facts from textbooks and teachers.
3) To develop and enhance business judgment , and skills so as to utilize the textbooks
knowledge about management in practice.
There is a case study process which the students learn is:
1) Get an overview of the case
2) Read the case thoroughly
3) Analysis of the case
4) Findings and conclusions
5) Recommendations

Sometimes students may be asked to prepare a report on a particular case . It consist of the
following points as :
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1) Title of the case
2) Main issues and problems
3) Analysis and evaluation of the case
4) Recommendations and plans
While preparing for the reporting of the case study , students should follow the folloing
guidelines:
1) Get an overview of the case
2) Read the case thoroughly
3) Provide proper recommendations














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Chapter 3: Analyses of case study
3.1 CASE 1: Reliance Retail A fresh approach towards retailing in India
Summary:
Reliance is one of the biggest company by market value in Mumbai. Dirubhai Ambani was the
founder of the Reliance group of industries ( RIL) . Mukesh Ambani the bigger son of MR.
Ambani was handling oil and chemical business where other son Anil Ambani was handling
petroleum and control of a motley collection of small companies. After a month ago a meetin g
was held in which Mukesh Ambani attended and saw that there was an increase incustomers for
purchasing groceries at gas stations which gave an idea o starting retail business. This case
describes RILS plans of venturing into the unfamiliar territory of retailing.In this case theories
from economics and sociology have explained Reliance expansion strategy into India ,one of
retails most promising markets.
India is the number one country in retail business. Unorganized retailers are small in scale ,
individual units which buy off invoice and evade formal taxes. In India there are many organize
and unorganized retail outlets. Household groceries and apparels have become more important in
retail industry. The food industry in retail outlets is growing in the next five years where the
apparel industry in retail outlets will grow in the next three years. The organize retail outlets
include hypermarkets, factory outlets and their examples are BIG BAZAR owned by Pantaloons
, WESTSIDE by Tata group. With lot of population entering India , it requires lot of
consumerism.
The Indian government has not been allowing international retail outlets as Carrefour, Wal-Mart,
Tesco have been restricted in wholesaling or cash and carry outlets. Retail deregulation in India
will take place for a long time .Reliance wants to take advantage of the rules so as to open more
retail outlets and have a huge amount of profit. The main competition in India is between the
organize retail outlets and unorganized retail outlets. In 2007, Reliance launched its retail outlets
in Delhi but failed to work as angry protestors threw stones and one day strike was held by
vegetable vendors. Politicans were also involved in this situation which failed the expansion of
Reliance retail outlets
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Observance:
Reliance industry was started by Dirubhai Ambani with a great savings of US $1000. The
company expanded and earned huge funds from public to launch a polyester plant. Reliance have
become one of the biggest industry to have a great polyster plant. The vision focuses on value
creation , economies of scale and the sheer will and hard work to convert threat into
oppurtunities. Reliance industry had a great marketing strategy of investing in a pan India retail
network by launching Reliance fresh .Reliance fresh is one of the biggest market to have stock
fresh produce and groceries. Sahakari Bhandaar is one of the biggest retail outlet in Mumbai .By
adopting the strategy from Sahakari Bhandaar, Reliance industry had gained first hand
knowledge about retail industry .But Mr. Ambani had an idea of opening hypermarkets and other
big retail outlets. Then Reliance launched Reliance Mart which sold everything from groceries to
clothes and also employed many people to earn profits for the industry. Reliance industries
wanted to have their retail outlets in 784 Indian towns and expansion into big cities.
The above discussion finds theoretical explanation in the Transaction Cost Analysis ( TCA) .
Transaction costs are cost of doing business. Transaction cost includes ex ante cost and ex post
transaction cost. Ex ante costs include negotiation cost, search cost while ex post transaction cost
include governance cost, opportunity cost and monitoring cost. By gaining great knowledge
Reliance has acquired Information Impactedness, according to Transaction Cost Analysis. This
provides Reliance with learning-by-doing, tactic knowledge of the retail industry that will equip
the company with the knowledge of running retail operations and provide possible solutions to
future retail problems. With the partnership of Reliance industries with Sahakari Bhandaar there
was an increase in store traffic for partnering firm. Reliance group is moving towards fullfiling
its target of opening and operating 100million square feet of retail space compromising of
6000outlets in 784 cities and towns by 2010-11. Mr. Mukesh Ambani had a dream of making the
largest retail stores in India than Carrefour and Tesco. By expanding rapidly, Reliance stands to
achieve the first mover advantage which will help gain non trivial information advantages over
rival retailers.
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Reliance industry also has agro-retail strategy which helps in supplying to backward sectors as
agriculture and retail. The distribution system a Farm to Fork supply chain enables the supply
starting from a farmer till the end that is a consumer. The company aims at creating over 1600
huge procurement and distribution hubs titled Reliance Mandis which help to supply food with
fresh produce and dairy products . These hubs also provide them with cold storage facilities,
fertilizers, fuel and credit. With such support Reliance retail aims at reducing the suppliers
problems. In Kerala the farmers sell their produce to these Mandis without giving any
commission and this mandis give immediate payment for their produce. The Reliance group is
building a cooperative agriculture movement that will boost surplus produce and give small
farmers more bargaining power. Partnering individually with Reliance will enable farmers to
receive a higher price for their produce while entering into a cooperative business will help to
have overall benefit of the farming community.
Due to bad road network in India , Reliance had purchased 35 tones fleet cargo planes for
transport of goods. This is not aimed of transporting goods to India but also aimed of exporting
the goods .Transaction Cost Analysis asserts that greater the physical perishability of the product
,the more likely the firm will favor gaining control over the procurement ecision and
coordination process that involve production route. Reliance must have total control over its
supply chain and logistics ,contracting of sup[ply chain process to external agents which will
create high transaction cost such as temporary delay which could bring low margins. Reliance
replenishes the stock twicein a day ,as replenishment of stock depends upon the sale through
rate.
Reliance wants to protect its business margin by avoiding payments of high rents . The company
has a telescopic vision of shifting big companies as Pantaloons, Shopper stop in future. Reliance
retail decision to own retail stores is to gain transaction advantage over competitors. Relianc also
thinks of future retail through e commerce before any retail market plans to do so. Reliance
Fresh also launched customer loyalty scheme which was accepted by more than 50000
customers.
Under the command of Mr. Mukesh Ambani, Reliance has become third largest petrochemical
refinery in the world. The upper echelons theory by Hambrick and Mason helps to know
organizational strategy besides giving an competitive edge to the firm. Nandan Nilekani, the
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CEO of Indias biggest Information Technology company describes that Mr. Ambani has done a
great job in bringing Reliance to a retail sector. Mr Mukesh Ambani has learned great leadership
skills from his late father during first oil refinery under construction in 1999. Reliance also had
launched brass of their company . The company had invested a lot in relationship so employees
remain loyal to the firm .
Conclusion:
Mr. Mukesh Ambani had a great idea to see the country more developed. But when he launched
Reliance retail and Reliance Mandis he thought of helping the poor people and earn huge profit.
He wanted to change the consumer regressive shopping mentality of people. He wanted to reach
retail scheme to 60% of the Indian population but he failed to do so. He wante to change the
living standards of people so many big hubs from Reliance like Reliance Mart, Reliance Trends
could come up.












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3.2 CASE STUDY 2: Air Deccan: Revolutionizing the Indian skies
Summary:
Air Deccan is one of the lowest airlines in the aviation sector. It was started in September 2003
where its maiden flight took off from Hyderabad. This flight was not successful as a fire broke
out in the turbo wings. Adding to such failure there were many important person in the flight as
Union Minister of state of civil Aviation and other senior politicians. Captain Gopinath was the
managing director of Air Deccan and had to face the media. Due to such failure Captain
Gopinath thought that it would lead to bad publicity and the passengers would drive off. Captain
Gopinath remained shocked and did his best succeeding at the task he had to do.
Air Deccan had started only with two flights in September 2003 but now it has more than 75
flights which operates in more than 32 destinations and also owns three Airbuses. This helps in
expansion of Air Deccan. Air Deccan has also earned a huge profit due to expansion and earned
US$120BNS. More Airbus was purchased by Captain Gopinath by cutting a deal with largest
manufacturer of civil aviation. He had idea that Airbus ply on trunk routes where small airports
would be connected by ATRs.
The distinctive strength of Air Deccan are the three airlines Indian airlines, Jet airways, Sahara.
These airlines helps in connecting to small towns and helps the poor people to travel from small
towns and rural areas. The small town airports were put into disuse but due to these airlines small
town airports are put into proper use. The countrys biggest airports Mumbai and Chennai
require little investment on part of government to recommision them and the airport terminals are
used as shed to people. Captain Gopinath says What the hell, they serve their purpose which
focuses on cost and functionally behind the personality of the man behind Air Deccan. In
addition to approaches to cost Air Deccan have several measures that are unique in context. This
has resulted in steady increase in the market share of the airlines and also seems to be the biggest
airlines in the next five years.



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Observance:
Gorur Ramaswamy Iyengar Gopinath was born into a rural family in Karnataka .He graduated
from National Defence Academy and post graduated from Indian Military Academy. In National
Defence Academy he met Captain Samuel who later became his business partner. Gopinath took
early retirement from army at age of 28. Captain Gopinath was very courageous. But after 28
Captain Gopinath did not know what to do so he returned to Gorur, where he lost his family.
Due to dam construction by government Captain Gopinaths family had to shift to remote
village. The government had compensated Gopinath with a land wher he thought of doing some
farming and kept it safe by staying in it. In early 90s Captain Gopinath wanted to start its own
business in India. He thought of civil aviation business which was deregulated in India and only
private air could fly in skies. Captain Gopinath wanted to open a heli- transport industry which
was not in India and he had studied a lot about heli-transport market in different countries of the
world. Later Captain Gopinath started heli-transport business in India with the name Deccan
Aviation with Captain Samuel. Helicopters were chartered for tourism, mapping, arieal
photography and other applications.
At the launch of Deccan Aviation Gopi had various offices and had to approach politicians for
various clearances. Gopi had got license after two and half years for starting heli-transport
business while he also did sericulture business side by side. After the license he also gave letters
to different countries for helicopters. The company started with two helicopters with an
investment of RS 35 lakhs. They invested more for buying helicopters and the payment was
given on time always. The Bank of India also extended their time for capital limit and then
business started. Later there was problem of parking of helicopter so Captain Gopinath
approached the Hindustan Aeronautics Limited in Bangalore where they gave Gopi the parking
of helicopters at Rs 6000 per helicopter. Then Gopi approached the Chief minister of Karnataka
to operate Deccan Aviation from Jakkur on the outskirts of Bangalore. Then the company
approached Technology Development and Investment Corporation of India Limited for more
finance and TDICI accepted the idea and gave the fund. Gopi then kept a chartered accountant
Mohan Kumar for their accounts and also helped the company by giving finance.
The helicopter business required great marketing after its launch in India.It was categorized into
On Call and Contract segments. On Call segment means total payment made for number of
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hours used for helicopters and Contract segment means fixed monthly charge for the client.
Helicopter business is not popular in India as people could not afford it and apprehension people
have travelling in helicopters. Due to such problems Gopinath thought that he could not do good
business. Captain Gopinath had an idea of using the helicopters for media purpose as NDTV,
AAJ TAK and so on to have good profit and business. Gopinath decided to harness Indias vast
potential as an attractive tourist destination due to wildlife, pilgrimage spots and so on. Captain
Gopinath and Captain Samuel both had sent letters to various pilgrimage, wildlife spots or large
open space area for landing of helicopters. Deccan Aviation then tied up with various hotels or
resorts at tourist destinations. The company would have a tourist package and then sell directly to
customers. The company offer the packages on charter basis and not on scheduled flight. The
company has also flown top celebrities such as David Rockefeller, Amitabh Bacchan. The use
of helicopter is done for sightseeing abroad but Deccan Aviation was used in India to increase its
market share of the company. The company also provided services to Vaishno devi in Jmmu
Kashmir and now Deccan Aviation has many hubs as Surat, Mumbai, and Ranchi. The company
had covered a great market share and earned huge profit. The company had a vision saying If it
is on the map, we will get you there.
The company has various limitations as Heli transport business is launched first time in India.
Heli transport business is also not feasible and to operate more than 20 helicopters in a country
like India. This led to slow growth rate in the industry. After gaining momentum of Deccan
Aviation into niche business, Captain Gopinath thought of doing some bigger business. Captain
Gopinath also got a chance of visiting USA and realized about the low cost fares for airlines .He
gave an example of Phoenix in USA where more than 1500 flights are used catering to 150000
passengers. Gopinath thought that low fares can help a common man to afford the prices to travel
to his destination. There was a great market for such low fare airlines in India. Due to this
concept low fare airline Air Deccan was born in 2003.
Captain Gopinath then had purchased two aircrafts of 42 seats each and also received great
support from the chief minister of Andhra Pradesh and Karnataka. During this period there were
three big airlines- Jet Airways, Air Sahara, and Indian Airlines which plied to domestic
countries. But Air Deccan plied to routes like Bangalore- Hubli which these flights did not ply.
Air Deccan then tied up with banks as ICICI, Citibank to handle payments through credit cards.
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People could book tickets through credit cards, phone bookings, internet bookings were done.
The E-Tickets were booked and within 24 hours of payment people would get the tickets. Air
Deccan being the lowest fare flight it would have 50% bookings by call centres, 40%through
travel agents and rest through corporate centres. Being a low cost airline there would be low
airport fees, reduction in commission of travel agents, more number of seats on aircraft, no
business class on aircraft and so on. Services on airlines are also simple , the passengers have to
purchase food and meals in the flight. In case of connecting flights, and passengers miss the
flight due to late arrival then low cost airlines do not provide stay in hotels for a night and so on.
Air Deccan also had several ideas of bringing down the project cost. They used a Delhi based
software which was web-based reservation where all the airlines use Galileo and Saber for
reservation system. All the airlines pay 4-8 million per passenger ticket where Air Deccan pays
30 lakhs per passenger tickets. Air Deccan had negotiated smartly with aircraft vendors. Air
Deccan had purchased aircrafts on lease by leasing for six months. Captain Gopinath says that
Miss the opportunity to provide aircraft to Air Deccan ,you have missed the fastest growing
aviation market in the world. Air Deccan waits for 15 minutes before take off as aircrafts are
airborne for a much longer time each day. It just takes one broadcast for Air Deccan to change
its fares for a particular flight on a particular day. If the flight is empty before depature then
people are given special facilities.
For all airlines there is a little amount of penalty for cancellation but for Air Deccan the penalty
is considerable. Any airline has to open booking 90 days in advance and as the day of departure
comes closer the fares start rising . Air Deccan operates o small airports having low traffic
problems as some airport may have only one flight a day like Jamnagar, Gujarat which operates
only one flight to Mumbai .For maintenance and repair also Air Deccan gives prepaid charges as
of insurance policies. Air Deccan targets lower class and middle class people so that every
common man like an auto driver can make his dream possible to fly. He also thought of
reserving some front seats for poor people. Even Azim Premji has travelled through Air Deccan
as he valued to ideas of low cost airlines. A passenger can buy the food or meals from the staff
and the staff gets 10% commission on what they sell.
Now the company has purchased Airbus which is larger against Indian airlines. The Air Deccan
carries 180 passengers as Indian Airlines carries 154 passengers. Turnaround time of Air Deccan
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is 50 minutes where of Indian Airlines is 1 hour. The Air Deccan also provides advertisements
on seats of airline pamphlets, meal menus and so on. Air Deccan provides the lowest rate to
customers as the other airlines charge more. The best example is that Air Deccan charge only
RS 2500 for passenger from Bangalore to Mumbai while other airlines charge RS 1200 per
passenger. Air Deccan charges less for advance booking prior to 90 days while its rates increases
to 6500 per passenger and also reserves some seats for passengers.
Conclusion:
Captain Gopinath had made Air Deccan one of the finest and lowest fare airlines in the world.
Poor people would say travelling to villages by train would cost low as compared to flights as
they would say that this facilities is affordable by rich people only. In todays world also there
are many people who are first time travelers in flights. Announcements and advertisements are
made in local language but not in Hindi or English. Air Deccan now operates to 24 destinations
with 75 flights a day and would like to increase to 100 flights so that the company can earn
profit and good reputation in aviation industry. If there is changes in jet fuel the profitability of
the company gets affected. Due to lot of takeoff and landing the Air Deccan has to create lot
of traffic due to limited runways and other responsibilities. The company also like to decrease
responsibilities by changing facilities and building more runways. The company wanted Air
Deccan not only to ply on domestic routes but also on international routes.








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3.3 CASE STUDY3: Maruti Udyog Limited The Competition Ahead
Summary:
Chairman Shinzo Nakanishi stated his shareholders in July 2004 that it was companys first
AGM since its public listing in July 2003. It had placed greater responsibility on employees to
perform well in the market and deliver value to shareholders . In the meeting there were talks
about Indias growing strategy in terms of Inflextion point, paradigm change . In year 2004-
05 Maruti Udyog Limited director Jadgish Khatter stated that sales was much high as compared
to any sales of Maruti Udyog Limited in many years. Increase in oil prices ,reduction in price of
certain models had made good profit for the company ,Mr. Shinzo had a challenge how to arrest
and decline in Marutis share market and reverse the trend.
Maruti Udyog Limited has managed to be number one company from the last two decades. The
market share of Maruti Udyog Limited has declined from 80%in 1990to 51%in 2007. Maruti
also followed value-for-money pricing strategy. Maruti had competition with variants as Omni,
Gypsy which faced tough competition against Zen, Alto and so on. In todays period many
people could not set their mind which perceive MUL as a mass-based car manufacture.. The
biggest delima of MUL is whether to change its corporate profile or strengthen its competency
of low cost manufacturing by improved productivity, economies of scale and so on. Maruti
should continue to strengthen the relationship with its dealers .and must make a huge amount of
profit. The owners of Maruti must enjoy as well as all parts ,spares must be available in all
service centres.
Observance:
In India Hindustan Motors was pioneer in car making along with Primer Automobiles also
joined. Both the car made cars in huge quantity due to license available from the government and
one had to pay a amount of money in advance compulsory before booking a car. There was
neither quality nor quantity as many business houses were joining such business. Maruti came in
year 1982 when Suzuki Motor Corporation and did a joint venture to make fuel efficient
passenger cars and it was named as Maruti. Maruti became the highest volume car in whole
ASIA including Japan and Korea. Suzuki Motor Company had seven partners worldwide and an
agreement was signed between Government of India and Suzuki in October 1982. In march 1994
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it became the first company to sell more than one million vehicles and it had also won the
number one award five times in a row from 2000-2004 . Maruti 800 was written as a matchbox
because it was small car and was pronounced to be caved in at slightest bump. Maruti did a job
with great benefit and had a delight for start and stop in the traffic of city.
Maruti had also introduced Omni in 1984 which was known as van avatar of MUL and had a
tough competition when Hyundais Santro and Daewoos Matiz entered into the market where
Maruti 800 was much in demand. Maruti then came out with Versa, Wagoner, Gypsy and other
cars but Maruti 800 is one of the cars which was exported more to Europe and South Africa.The
companys vision was The leader in Automobile industry creating customer delight and
shareholders wealth: a pride to India. Japanese management of team spirit was imbibed through
common uniform, open office, easy accessibility, speedy communication and decision making
and so on. The market was ready to take any number of Maruti 800 as the suppliers were
growing with the market and car was the best and Maruti had introduced new cars in the market.
Suzuki wanted to use the technology and make new cars which could be the best than Maruti 800
but Government of India did not allow and gave it to Maruti. Maruti and Suzuki had a joint
venture where Suzuki equity shares was 40$in 1989 which increased to 50% in 2002.
Suzuki held 54% shares, Government of India held 18% shares where the rest were mutual funds
and the company got listed in Bombay Stock Exchange. Then Heavy Industry Minister Santosh
Mohan Dev told the press that Maruti remaining shares are open for sale and then we exit. Then
Government had to bid at 8% per share which were bought by many companies as State Bank Of
India, SIDBI and so on. With such divestment the Government of India had lost the opportunity
of appointing a director of the company. Prime Minister also offered 20shares to 6609 Maruti
employees. In countries like US the level is 800 cars per thousand but in India it is 7 cars which
much low. The passenger vehicle market is defined into passenger cars, multipurpose cars ,
utility vehicles and so on.There are various car sector depending upon the prices as :
a) Segment A- lower than Rs 3 lakhs
b) Segment B- between 3 lakhs and 5 lakhs
c) Segment C-between 5 lakhs and 10lakhs
d) Segment D- between 10lakhs and 25 lakhs
e) Segment E- above 25 lakhs
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People in India and in world use many Maruti cars owing to higher prices from lower ones .
There are two segments where Maruti has done great sale in two segments as Maruti Esteem,
Maruti Alto and so on.MUL has given increase of 90%of its revenues in past years. Santro the
product of Hyundai was one of best selling small cars but later it failed as its production was in
Europe where it was the best. As the production industry came to India its sales doubled. The
average age of Santros owner was much lesser than that of Maruti as Marutis parts were
available at a cheaper rate in the service centre. Indica a product of TATA motors was made by
Indians for Indians and was sold at the price of Marutis Zen, Marutis 800. TATA Indica had to
be sent to MG Rover to UK as they could not service in India. Another car Fiat Palio was
awarded car of the year.So Marutis sales was good as they could not achieve the award . Plio
was a strong competitor to Maruti for a limited period. Then later Fiat was in trouble as it had
launched Fiat Palio Diesel.
There were five players in the market as US, Japan, Korea, and Italy and so on. Quality
standards have been less or more defined. Tata came out with Rs 1 lakh car in the market which
was followed by Renault and Bajaj. Maruti adopted both the process and technology of Suzuki
and the employees of Suzuki were later sent to SML plant. Quality was the hall mark of maiden
product and special services were distributed and mechanics were properly trained. Fleet
management solutions which include ups and downs in vehicle life brought a new dimension to
servicing. The introduction of new products was with the consent of both the partners. As Maruti
have 11 models with 64 variants while some brands have fewer models and variant of cars.
MULs product technology was visible at the market place and the process in the plant was
upgraded. Investments for Maruti were becoming red in some years were the opinion of ministry
dealing with Joint venture.
The liberalization of Indian economy was changed the rules of the game not only on roads but
also in minds of customers. Euro I norms were applied in 1999 but it had to be changed to Euro
II IN 2000which became applicable from 1 st, April 2000. Matiz of Dawoo had complaints as it
was pushed out of competition due to tough trouble in its mother plant but Korean car Santro of
Hyundai had a great stride. There are other brands as Fiat, Miubhishi and so on which
suspension package was praiseworthy. MULs shares were falling as Santro entered the market
there was plenty of buying of cars nad a new segment format was invented as:
Mini-Up to 3400mn
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Compact- Up to 4000mn
Mid-size-Up to 4500mn
Premium up-to-4700mn
Luxury- Up to 5000mn
From the above segments MULs hade Mini, Compact, Med-size segments which had reduced
the cost of warranty of vehicles. In the past MUL focused on research and development but it
had more attention on styling, clay modeling, computer aided design, and evaluating them. Many
engineers from MUL had been trained from six months upto two years in SMC as many were
involved in bringing diesel cars as swift and swift desire. Ratan Tata the chairman of the
company of Tata group announced that he had made fast innovations of cars in three years.In the
next few years MUL decided to invest in two ventures that is transmission plant and
manufacturing plant. MUL had decided that it will handle 70% of the shares while SMC will
handle only 30% of the shares. In India there are more than 40 million people own a two
wheeler as they own a car they can reach home safely. Hyundai has launched its plant at
Irrungattukotai near Chennai which has made sales more in the country.
Hyundai has made more investment than any other brand in the country by launching this plant.
The managing director has said that Hyundai has become a major player in 10years.

Conclusion:
Marutis 800 had made a great start by rolling out good car which ran for years and years and
finally has made a way out from the peoples mind and also market which earned a lot of profit
in the market and made way for people for travelling in the whole world. Indian car market is
sweeked towards the small car segment will see a tilt towards a larger segment and more
premium cars. Cars will become cheaper as income will grow and every person can buy it so that
company can make a huge profit and turnover in the market. A reporter has said that by
overcrowding automobiles space and players shifting their focus between price war then The
race is far from over




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3.4CASE 4: On The Job-Strategy Case Of Naukri.Com
Summary:
In November 2006 Info Edge was listed in Bombay stock exchange and National stock exchange
which was converted into public limited company from private limited company. After that name
was changed to Naukri.com which means a website for job. Naukri.com was started by Sanjeev
Bikhchandani and this was commonly used by Internet service companies. There are ample
materials which underscores business environment factors of company like Info Edge.
Naukri.com has much success in the market as compared to 99acres.com and Jeevansathi.com.
There are many innovations for such companies like format of the website, ease of accessing the
portal and so on. The later part of the case describes about the description of future of Info Edge.
The case also draws lessons for travel, hospitality and others in which these business models are
traded. Sanjeev Bhikchandani used to work in HMM now Glaxo in 1990s ere there was no
partition in the office. When Business India used to arrive in the office every employee used to
start reading from front page to the back where they used to look for jobs. Headhunters are
looking for clients to offer them jobs and these jobs were not advertised formally in channels.
Sanjeev thought that job offers could be aggregated and matched with job resumes available
which creates big business opportunity.
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Observance:
Sanjeev dreamt of doing MBA, working for few years. Sanjeev had studied from St. Columbus
School in Delhi and could not do MBA as he was from a middle class family. He did Economics
from St Stephens College as he was colour blind. Then he worked in an advertising company and
gave CAT entrance exam and got admission in IIM Ahmedabad. Then Sanjeev got the job in
HMM and worked for one and half years. Then he thought of starting his own company which
was known as Info Edge where he used to give the employees 800RS as salary. Another
company was set up with his partner. His partner would pick up trademarks from public library
of trademark registrar. Then the set up interviews for fresh engineering graduates and the next
five years they struggled with their work as they stopped the trademark selling work.
There used to be IT exhibition in October 1996 which was in Delhi where Sanjeev wanted to go.
When Sanjeev went to a stall in that exhibition he saw www. Then he asked the meaning to the
owner of the stall and the owner said that www means World Wide Web which he thought was
interesting . Sanjeev wanted to setup a website of own but could not do as its servers are in USA.
So he asked his brother to give him loan for the website server. After some time he got married
as his wife was working with Nestle. In olden days people would have bikes as they could not
afford to buy cars. But Sanjeev even did part time jobs in two companies for his earning. Then
his friends collected lot of newspaper and founded jobs which were not in a proper format and
they put the jobs in a proper format and gave to Sanjeev which created a website called
Naukri.com. At that time there were many websites focusing on non residents of India. But this
website was made for Indians to find a job. Naukri .com was launched in April1997 as it earned
more than 3 lakhs in its starting year. Sanjeev required more money to build the company
infrastructure. Later Info Edge had various websites of Naukri.com as www.jeevansathi.com for
matrimonial, www.99acres.com for estates, www.naukrigulf.com for finding jobs for middle east
and so on. In the next 5 years the company had generated a huge amount of profit and there
were 1500 employees in the company. The company had an profit of 2.73 crores which was
subscribed by promoters with 54.6%and non promoters of 45.4% . The promoters included
Sanjeev Bhikchandani (43.24%), Hitesh Oberai (7.6%), and Surabhai Bhikchandani (1.37%).
The company claimed to have a good profit and strong cash flow. There were some factors
which would affect the profitability as interest rates, extent of liquidity in financial markets. The
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business model of the company was the Internet company model where it would earn revenue
fee for exchanging information of advertising products and services. The company had four
divisions that were Recruitment, Quadrangle, Matrimonial, Real estate. Info Edge has a ver
good growth strategy for its business. It has good SWOT analysis where oppurtunities and threts
are linked to internet. Growth in employment may be positive or negative depending upon macro
economic conditions. There are 42 million users of internet who use Naukri.com and this will
increase in the near future. The important thread of Info Edge was that people use the internet to
access information to satisfy those needs. Education is a part of life where people look for a job
after that.
Naukri.com is the most visible brand of Info Edge and in March 2007 it had 10000 resumes
everyday .The country has numerous educational institution and most of the students ply or their
job. Naukri.com is not just a recruitment site but also an advertising site. It also offers mobile
hiring for mobile section where people can write their resume, display their resume and so on.
Recruiters have a special entry point through their username and password. The recruitment
services have also many competitors in the field as Monster.com, Click jobs, Job street and so
on. Competition is at the lower end of the market and ups and downs in recruitment bring
uncertainties. Jeevansathi is one of the biggest matrimonial sites in India. Times Of India is one
of the biggest print media of matrimonial sites. In March 2007, 17 million users used
matrimonial sites which would be increased to 25 million in 2008. Many people have logged in
Jeevansathi and have done their marriage. As Jeevansathi was overcrowded many times people
used Shadi.com which gave a tough competition to Info Edge. Jeevansathi one of the best
matrimonial sites in India .99acres.com is one opf the real estate site of Info Edge. There are
several reasons of increase in real estate through rising incomes, changesin social structure, and
avaibility of home finance and so on. People used to take help for buying and selling of property
and even newspaper would give a great information about real estate. But Info Edge launched
99acres.com where there is full information about buying and selling of property,exchange of
real estate and so on. Till 2007, 99acres.com had information about 69000 buildings and other
information. 99acres.com also had a tough competition from other real estate sites as
makaan.com, Indiaproperty.com and son on.
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The board of directors of Info Edge has nine directors where four are independent and four are
non independent and one is a nominee. Naukri.com has Vineet Singh as vice president where as
Deepali Singh is the head of 99acre.com. Harveen Bedi is quadrangle division head and US
operations are looked by Sushil Bhikchandani. The sources of funds are charged on recruitment ,
real estate, advertisement services. The technology used by Info Edge is internet and IT. The
service design is critical to offer services on portals. Innovations are adding to old services and
due to use of Naukri.com as the most the server can be hacked. Disaster recovery system also
need to remain in working condition to forestall risk of breakdown.
Naukri.com is one of the visible brands of Info Edge but Jeevnsathi.com and 99acres.com are in
process to be established . The human resource function at Info Edge is critical as the company is
operating in service business where the number of employees from 870to 1200 and to 1500 at
present. The human resource information helps the employees to maintain employee records and
facilitates report generation for analysis. There is employee stock option to motivate and involve
the employees in wealth generation. When World Wide Web developed online classified
services are also developed which are as old as Internet news group. The online classified
services were more convenient, cheap for employees. DLFs employees has moved to job portals
such as Naukri.com HR managers bought huge reduction in recruitment cost by using online
classified services. People are choosing the new media as they are getting expansion of business
services. Online classified services have been used for various purposes as online education,
online web logging and so on. These services have been expanded not only outside India but also
in India.
Conclusion:
Internet based services will be connected to internet at one end and to market at other side. The
growing population is using the online classified services so they can get good jobs , and other
services. This helps the company to earn profit and will earn good reputation in the market. The
Info Edge which was started by Sanjeev Bhikchandani was Naukri.com even today has a lot of
importance and people use it for their job. Info Edge would be also starting shiksha.com as an
education portal. Sanjeev Bhikchandani has become more ideas an and want to reach the
company to a higher level in the world. Even Jeevansathi.com has become one of the best
matrimonial site where people are marrying at a greater scale. 99acres.com went on as the best
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real estate site where people of huge companies have used to get higher salary jobs and make the
site more popular. Sanjeev Bhikchandani has said that we have created wealth and also an
institution. He wants to make the company more profitable and one of the best on the job
company.






3.5CASE 5: Bharat Petroleum Corporation Limited
Summary:
In 1952 Indian government signed an agreement with Burmah Oil Company and Shell Petroleum
Company and set up a refinery named Burmah Oil Refineries in Mahul. In 1976 Indian
government changed the name to Bharat Refineries and in 1977 it was named as Bharat
Petroleum Corporation Limited by Indian government. Bharat Petroleum Corporation Limited
was an integrated refinery and marketing company. It has various types of products from
Petroleum to LPG. It is the first petroleum company to have ISO9002 and ISO14001
certification. Bharat Petroleum Corporation Limited has a good retail network with 4500 retail
outlets and 22 LPG gas stations. The refinery is considered one of the best in the petroleum
industry. The refinery also has the biggest pipeline from Mumbai to Manmad of about 255 km.
Bharat Petroleum Corporation Limited was one of the best marketing companies in India.
Petroleum industry was tightly controlled with price control, no competition clause, raw
materials, distribution and marketing of petroleum products. Mr. Arun Maira was consulted by
Bharat Petroleum Corporation Limited for new structure and design. These changes also
changed the working conditions, attitude, clear lethargy of employees. With the help of new
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structure BPCL also won Prime Ministers MOU Award for excellence in 1998-1999. Then in
late end of 1999 the refinery won the Federation of Indian Chambers of Cmmerce and Industry
Award or the work done in rural areas. And then it won the Golden Peacock Management
Award for managing the environment. BPCL was in a better position than other frirms facing
challenges of total deregulation and removal of price control.

Observance:
The petroleum industry had international players operating in the country till nationalization in
1970.The prices of raw materials, production capacity, distribution were regulated by the
government. Due to international players the government wanted to improve the distribution
network by opening new retail outlets and reducing competition between outlet of different
players. The Administered Pricing Mechanism was launched in 1977 to restrict import of parity
prices of finished goods. The disadvantage of import parity price was delink age of local cost of
production. APM was administered by Oil Coordination Committee to give raw materials and
products at exrefiniry prices to petroleum station and gas station.
Under Narasimha Raos government petroleum sector was opened for private investment. The
investment returns were ensured through APM for public as well as private sector. Private
players like Reliance, Essar, and Birla group invested in petroleum sector and set up their
refineries. Then later in 1995 it was decided to dismantle APM and removed by 2002. In 1995
when the petroleum companies were facing challenges in the post APM regime multinational
company and Indian private sector entered the market. At that time Reliance had also set upon
biggest refineries. Because of government regulations the petroleum company had no freedom
of marketing the products after dismantling of APM the companies were allowed to market the
products. As a part of economic reforms government was actually pursuing private sector
organizations. Government said to have a business orientation by public sector organizations.
The initiation of restructuring the organization was under Mr. Sundararajan who had studied
atleast 200 books on petroleum and oil to compete with MNCs with deregulation. Later a group
of external experts were formed under Mr. Arun Maira to change and build the new structure of
Bharat Petroleum Corporation Limited. The top managers had said that ADL provides the best
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solution and implementation and not just reports. A change team had to be formed in which Mr.
Sundararjan did not select employees with higher degrees and also said that he did not nominate
the best managers in BPCL because if people are given the right job then they would rise to it.
The change project was named as Customer Service and Customer Satisfaction where good
training is given to employees to develop skills in terms of diagnosis, change strategy
formulation and so on. The employees in BPCL could not understand that why ADL is enabling
us to think and decide what is the best for the organization. A visioning exercise had to be
conducted for clarity and understanding about future of organization. The exercise flowed from
top management till junior management. The exercise gave some instruction to the employees of
organization that :
A) Be the best employees
B) Improve the management boundary
C) Fulfill social responsibilities
D) Excellent customer care and service
This exercise made the employees realize the possibilities of the future. With both the exercise
done then wide assessment exercise would be conducted for an organization. By this exercise six
breakthrough teams were formed as marketing of the organization was reviewed. The next was
refining where LPG plants, lube oil refining process were compared from international players.
The logistics of each and every part was compared with benchmark and competitors. LPG team
compared LPG plant with international players and lubricants had seen a positive competitive
position where as support services evaluated human resource practice. The breakthrough teams
found some instructions as:
a) Low customer focus and customer satisfaction
b) Opportunities for quick improvement
c) Many opportunities for quick improvement
From the inputs from shared vision and reality there was a change plan which included
organisational assessment, well defined corporate values and so on. The breakthrough teams had
opportunities for small changes to be done during the assessment process. A special task force
was also working in parallel which were given proper training. Communication became an
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important part of the change process. The informal channel of communication was properly
taken care by breakthrough teams. One of the member of CUSECS said that the newsletter and
communication by members to their parent department were useful for updates of whole
organization. The top management was involved during restructuring process and also acted as a
mentor of the team. He gave freedom to employees to give their creative ideas . Mr.
Sundararajan said that lip service must be low than doing work. Many employees were trained
by Innovation Associates for organizational learning. A team of thirty and sixty part time
coaches were formed and this group formed Visionary Leadership Planning and other coaches
formed the Foundations of Organizational Learning. The VLP programme is designed to clarify
teams and make understand the unique existence, co creating team aspirations and FOL designs
of creating a common language of learning in the organization . Later a new structure was
designed with the help of employees even top management was personally involved. The new
structure was not the structure envisioned by the change team which was not accepted to all
members of the top management team.
The new structure was implemented with various modifications in LPG SBU. The older structure
was functionally organized as refineries, marketing, personnel, finance. The whole India was
divided into 22 divisions where each division had a manager and divisional manager reports to
regional manager. Each of these were responsible for sales, engineering for all customer
segments. The old structure had created a bottleneck between the strategy formulators and
implementations in terms of regional structure and between the field staff and corporate offices.
The new structure was focused on customer and business process at top management. There are
six SBUs- Retail, Lubes, LPG, Commercial, Aviation, Refinery. The change was introduction
of territories and there were 22 territories which would directly report to SBUs for specific
product. Administrative offices would supply only to 125 main fuels terminals and 35LPG
bottling plants. Two thousand people were removed from the organization after new roles were
provided.
Conclusion:
Bharat Petroleum Corporation Limited had made many changes in its new structure and in the
future many new changes will occur. It is one of the most important and best petroleum
companies in India till date and provides the best services to its employees. Due to such
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petroleum company in todays world the vehicles are having a smooth run on road of India. Even
today BPCL is earning a huge amount of profit and having the best gas stations in the world. It is
important to know that even the structure changes, the employees are awarded with higher post
and also has great knowledge about new features. BPCL does not state here about its structure
but also help the employees to train thm so they can have a good knowledge about it.In the last
Mr. Sundarajan says that people must not be prepared to face the tiger but face the tiger.







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