General Management:

General management is arguably the ultimate realization of a career in business.

It entails complete responsibility, including profit and loss accountability, for the
performance of an entire business or a business unit.
General managers typically have cross-functional responsibility; that is, they make
decisions that involve the coordination and integration of functional areas such as
sales, marketing, human resources, finance, and production. They manage
individuals in charge of these various areas and coordinate their activities. The
CFO may know more about finance and the CMO more about marketing, but the
general manager has to know enough about each function to:

Coordinate its activities with the organization's overall strategy, and

Plan the business's strategy for going forward.

Strategic Management - An Introduction

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.
SWOT ANALYSIS
A SWOT analysis (alternatively SWOT matrix) is a structured planning method
used to evaluate the strengths, weaknesses, opportunities and threats involved
in a project or in a business venture. A SWOT analysis can be carried out for a
product, place, industry or person. It involves specifying the objective of the
business venture or project and identifying the internal and external factors that
are favorable and unfavorable to achieve that objective. Some authors credit
SWOT to Albert Humphrey, who led a convention at the Stanford Research
Institute (now SRI International) in the 1960s and 1970s using data from Fortune
500companies.[1][2] However, Humphrey himself does not claim the creation of
SWOT, and the origins remain obscure. The degree to which the internal
environment of the firm matches with the external environment is expressed by
the concept of strategic fit.
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Strengths: characteristics of the business or project that give it an

advantage over others.

Weaknesses: characteristics that place the business or project at a

disadvantage relative to others.

Opportunities: elements that the business or project could exploit to its

advantage.

Threats: elements in the environment that could cause trouble for the
business or project.

Identification of SWOTs is important because they can inform later steps in

planning to achieve the objective.
Competitive advantage
In 1980, Porter defined the two types of competitive advantage an organization
can achieve relative to its rivals: lower cost or differentiation. This advantage
derives from attribute(s) that allow an organization to outperform its
competition, such as superior market position, skills, or resources. In Porter's
view, strategic management should be concerned with building and sustaining
competitive advantage.
Value chain

Michael Porter's Value Chain

Porter's 1985 description of the value chain refers to the chain of activities
(processes or collections of processes) that an organization performs in order to
deliver a valuable product or service for the market. These include functions such
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as inbound logistics, operations, outbound logistics, marketing and sales, and

service, supported by systems and technology infrastructure. By aligning the
various activities in its value chain with the organization's strategy in a coherent
way, a firm can achieve a competitive advantage. Porter also wrote that strategy
is an internally consistent configuration of activities that differentiates a firm from
its rivals. A robust competitive position cumulates from many activities which
should fit coherently together.
Porter wrote in 1985: "Competitive advantage cannot be understood by looking
at a firm as a whole. It stems from the many discrete activities a firm performs in
designing, producing, marketing, delivering and supporting its product. Each of
these activities can contribute to a firm's relative cost position and create a basis
for differentiation...the value chain disaggregates a firm into its strategically
relevant activities in order to understand the behavior of costs and the existing
and potential sources of differentiation.
Core competence
Gary Hamel and C. K. Prahalad described the idea of core competency in 1990,
the idea that each organization has some capability in which it excels and that the
business should focus on opportunities in that area, letting others go
or outsourcing them. Further, core competency is difficult to duplicate, as it
involves the skills and coordination of people across a variety of functional areas
or processes used to deliver value to customers. By outsourcing, companies
expanded the concept of the value chain, with some elements within the entity
and others without.[33] Core competency is part of a branch of strategy called
the resource-based view of the firm, which postulates that if activities are
strategic as indicated by the value chain, then the organization's capabilities and
ability to learn or adapt are also strategic.
Components of a Strategy Statement
The strategy statement of a firm sets the firms long-term strategic direction and
broad policy directions. It gives the firm a clear sense of direction and a blueprint
for the firms activities for the upcoming years. The main constituents of a
strategic statement are as follows:
1. Strategic Intent

An organizations strategic intent is the purpose that it exists and why it will
continue to exist, providing it maintains a competitive advantage. Strategic
intent gives a picture about what an organization must get into
immediately in order to achieve the companys vision. It motivates the
people. It clarifies the vision of the vision of the company.
Strategic intent helps management to emphasize and concentrate on the
priorities. Strategic intent is, nothing but, the influencing of an
organizations resource potential and core competencies to achieve what at
first may seem to be unachievable goals in the competitive environment. A
well expressed strategic intent should guide/steer the development of
strategic intent or the setting of goals and objectives that require that all of
organizations competencies be controlled to maximum value.
Strategic intent includes directing organizations attention on the need of
winning; inspiring people by telling them that the targets are valuable;
encouraging individual and team participation as well as contribution; and
utilizing intent to direct allocation of resources.
Strategic intent differs from strategic fit in a way that while strategic fit
deals with harmonizing available resources and potentials to the external
environment, strategic intent emphasizes on building new resources and
potentials so as to create and exploit future opportunities.
2. Mission Statement
Mission statement is the statement of the role by which an organization
intends to serve its stakeholders. It describes why an organization is
operating and thus provides a framework within which strategies are
formulated. It describes what the organization does (i.e., present
capabilities), who all it serves (i.e., stakeholders) and what makes an
organization unique (i.e., reason for existence).
A mission statement differentiates an organization from others by
explaining its broad scope of activities, its products, and technologies it
uses to achieve its goals and objectives. It talks about an organizations
present (i.e., about where we are). For instance, Microsofts mission is to
help people and businesses throughout the world to realize their full
potential. Wal-Marts mission is To give ordinary folk the chance to buy
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the same thing as rich people. Mission statements always exist at top level
of an organization, but may also be made for various organizational levels.
Chief executive plays a significant role in formulation of mission statement.
Once the mission statement is formulated, it serves the organization in long
run, but it may become ambiguous with organizational growth and
innovations.
In todays dynamic and competitive environment, mission may need to be
redefined. However, care must be taken that the redefined mission
statement should have original fundamentals/components. Mission
statement has three main components-a statement of mission or vision of
the company, a statement of the core values that shape the acts and
behaviour of the employees, and a statement of the goals and objectives.
Features of a Mission
a. Mission must be feasible and attainable. It should be possible to
achieve it.
b. Mission should be clear enough so that any action can be taken.
c. It should be inspiring for the management, staff and society at large.
d. It should be precise enough, i.e., it should be neither too broad nor
too narrow.
e. It should be unique and distinctive to leave an impact in everyones
mind.
f. It should be analytical,i.e., it should analyze the key components of
the strategy.
g. It should be credible, i.e., all stakeholders should be able to believe
it.
3. Vision
A vision statement identifies where the organization wants or intends to be
in future or where it should be to best meet the needs of the stakeholders.
It describes dreams and aspirations for future. For instance, Microsofts
vision is to empower people through great software, any time, any place,
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or any device. Wal-Marts vision is to become worldwide leader in

retailing.
A vision is the potential to view things ahead of themselves. It answers the
question where we want to be. It gives us a reminder about what we
attempt to develop. A vision statement is for the organization and its
members, unlike the mission statement which is for the customers/clients.
It contributes in effective decision making as well as effective business
planning. It incorporates a shared understanding about the nature and aim
of the organization and utilizes this understanding to direct and guide the
organization towards a better purpose. It describes that on achieving the
mission, how the organizational future would appear to be.
An effective vision statement must have following featuresa. It must be unambiguous.
b. It must be clear.
c. It must harmonize with organizations culture and values.
d. The dreams and aspirations must be rational/realistic.
e. Vision statements should be shorter so that they are easier to
memorize.
In order to realize the vision, it must be deeply instilled in the organization,
being owned and shared by everyone involved in the organization.
4. Goals and Objectives
A goal is a desired future state or objective that an organization tries to
achieve. Goals specify in particular what must be done if an organization is
to attain mission or vision. Goals make mission more prominent and
concrete. They co-ordinate and integrate various functional and
departmental areas in an organization. Well made goals have following
featuresa. These are precise and measurable.
b. These look after critical and significant issues.
c. These are realistic and challenging.
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d. These must be achieved within a specific time frame.

e. These include both financial as well as non-financial components.
Objectives are defined as goals that organization wants to achieve over a
period of time. These are the foundation of planning. Policies are
developed in an organization so as to achieve these objectives. Formulation
of objectives is the task of top level management. Effective objectives have
following featuresf. These are not single for an organization, but multiple.
g. Objectives should be both short-term as well as long-term.
h. Objectives must respond and react to changes in environment, i.e.,
they must be flexible.
i. These must be feasible, realistic and operational.

Porter five forces analysis

A graphical representation of Porter's five forces

Porter five forces analysis is a framework that attempts to analyze the level of
competition within an industry andbusiness strategy development. It draws
upon industrial organization (IO) economics to derive five forces that determine
the competitive intensity and therefore attractiveness of an Industry.
Attractiveness in this context refers to the overall industry profitability. An
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"unattractive" industry is one in which the combination of these five forces acts to
drive down overall profitability. A very unattractive industry would be one
approaching "pure competition", in which available profits for all firms are driven
to normal profit. This analysis is associated with its principal innovator Michael E.
Porter of Harvard University.
Porter referred to these forces as the micro environment, to contrast it with the
more general term macro environment. They consist of those forces close to
a company that affect its ability to serve its customers and make aprofit. A change
in any of the forces normally requires a business unit to re-assess
the marketplace given the overall change in industry information. The overall
industry attractiveness does not imply that every firm in the industry will return
the same profitability. Firms are able to apply their core competencies, business
model or network to achieve a profit above the industry average. A clear example
of this is the airline industry. As an industry, profitability is low and yet individual
companies, by applying unique business models, have been able to make a return
in excess of the industry average.
Porter's five forces include - three forces from 'horizontal' competition: the threat
of substitute products or services, the threat of established rivals, and the threat
of new entrants; and two forces from 'vertical' competition: the bargaining
power of suppliers and the bargaining power of customers.
Porter developed his Five Forces analysis in reaction to the then-popular SWOT
analysis, which he found unrigorous and ad hoc. Porter's five forces is based on
the Structure-Conduct-Performance paradigm in industrial organizational
economics. It has been applied to a diverse range of problems, from helping
businesses become more profitable to helping governments stabilize
industries. Other Porter strategic frameworks include the value chain and
the generic strategies.