INSITITUTE OF BUSINESS AND

TECHNOLOGY
BIZTEK

By:
Asad Mazhar
 ASSIGNMENT NO. 1

a) Discuss briefly following terms:

• Strategy
• Tactics
• Operations
• Vision
• Mission
• Goal

VISSION:-

A vision statement is sometimes called a picture of your company in the future but it’s so much
more than that. Your vision statement is your inspiration, the framework for all your strategic
planning.

A vision statement may apply to an entire company or to a single division of that company.
Whether for all or part of an organization, the vision statement answers the question, “Where do
we want to go?”

What you are doing when creating a vision statement is articulating your dreams and hopes for
your business. It reminds you of what you are trying to build.

MISSION:-

A mission statement is a brief description of a company's fundamental purpose. A mission

statement answers the question, "Why do we exist?"

The mission statement articulates the company's purpose both for those in the organization and
for the public.

The difference between a mission statement and a vision statement is that a mission statement
focuses on a company’s present state while a vision statement focuses on a company’s future.

STRATEGY:-
Strategy is a framework which guides those choices that determine the nature and direction of
an organization

Alternative chosen to make happen a desired future, such as achievement of a goal or solution
to a problem.
Art and science of planning and marshalling resources for their most efficient and effective use.
The term is derived from the Greek word for generalship or leading an army

GOAL:-
Objective or target, usually driven by specific future financial needs. Some common financial
goals for an individual are: saving for a comfortable retirement, saving to send children to
college, managing finances to enable a home purchase, minimizing taxes, maximizing return on
investments given a certain risk tolerance, and estate or trust planning. Given a person's goals,
he/she decides on a pattern of expenses and suitable investments that will enable those goals
to be achieved. Institutions also have financial goals, for example making certain pension
contributions at specific times, or retiring a certain amount of debt by a certain date. Often, both
people and institutions find it useful to employ a professional to help them in setting up a
financial plan that will enable their goals to be met.

TACTICS:-
Tactics are the specific actions, sequences of actions, and schedules you use to
fulfill your strategy. If you have more than one strategy you will have different tactics for each.

OPERATIONS:-
A business, unit or function within a company.

b) WHAT DO YOU UNDERSTAND BY STRATEGIC MANAGEMENT?

Strategic management can be defined as the art and science of formulating, implementing, and
evaluating cross-functional decisions that enable an organization to achieve its objectives.

The term strategic management is used synonymously with strategic planning.

Stages of Strategic Management

The strategic-management process consists of three stages.

a. Strategy formulation includes developing a vision and mission, identifying
an organization’s external opportunities and threats, determining internal
strengths and weaknesses, establishing long-term objectives, generating
alternative strategies, and choosing particular strategies to pursue.
b. Strategy implementation requires a firm to establish annual objectives,
devise policies, motivate employees, and allocate resources so that formulated
strategies can be executed; strategy implementation includes developing a
strategy-supportive culture, creating an effective organizational structure,
redirecting marketing efforts, preparing budgets, developing and utilizing
information systems, and linking employee compensation to organizational
performance.
c. Strategy evaluation is the final stage in strategic management. Managers
desperately need to know when particular strategies are not working well;
strategy evaluation is the primary means for obtaining this information.
 ASSIGNMENT # 02

Q) Draw a line showing a comprehensive strategic management

model?

A COMPREHENSIVE STRATEGIC-MANAGEMENT MODEL

 ASSIGNMENT NO. 3

a) Discuss briefly any ten benefits of strategic management.

BENEFITS OF STRATEGIC MANAGEMENT

Identification of Opportunities:-
It allows for identification of prioritization and
exploitation of opportunities.

Identification of Problems:-
It provides an objectives view of management
problems-

Framework for Improving:-

It represents a framework for improved coordination
and control of activities.

Challenges & Coordination:-

It minimizes the effect of adverse conditions &
changes.

Framework for Communications:-

It creates a framework for internal
communication among personal.

Integrated Efforts:-
It helps integrated the behavior of individual into a total
efforts.

Forward Thinking:-
It encourages forward thinking.

Positive Attitude:-
It encourages a favorable attitude towards change.

Team Work:-
It allows more effective allocation time and resources to identical
opportunities.

Dynamic Leadership:-
 It gives a degree of discipline and formality to the
management of business.

b) Discuss briefly any ten pitfalls in strategic planning?

PITFALLS IN STRATEGIC PLANNING

The pitfalls of strategic management are as follows:

1. Over Control of Resources:-

Using strategic planning to gain control our
decision and resources.

2. Poor Control of Resources:-

Strategic planning only to satisfy accreditation
or regulatory requirements.

3. Too Hasty Decision:-

Too hastily moving from mission development to
strategy formulation.

4. Lack of Involvement of Employees:-

Failing to communicate the plan to
employees, who continue working in the
dark.

5. View Strategic Management as Unnecessary:-

Viewing planning as unnecessary
or un important.

6. No Standard Set for Performance:-

Failing to use plans as standard for
measuring performances.

7. Random Planning:-
Becoming so engrossed in current problems that in
sufficient or no planning.

8. Intuitive Decisions:-
Top managers making many intuitive decisions that
conflicts with the formal plan.
9. Poor Work Environment:-
Failing to create a collaborative climate
supportive of change.

Rigid Planning:-
 Being so formal in planning that flexibility and creativity
are briefed.

c) Discuss briefly any ten reasons why some do not strategic

planning?

FIRMS NO STRATEGIC PLANNING

Some firms do not engage in strategic planning and sometime do

strategic planning but receive no support from managers and
employees. Some reasons for poor or no strategic planning are as
follows:

1. Poor Motivation:-
Some organization do not consider employees as
there most important assets, therefore less and poor
motivates has carry the employees in organization.

2. Poor Reward Structure:-

When a organization assumes success it often
fails to reward success. When failure occurs
then the firms may punish. In this situation it is
better for an individual to do nothing then to
risk trying to achieve something fails and be
punished.

3. Wastefulness:-
Some firms see planning as a waste of time because
no marketable product is produced. Time spent on
planning is an investment.

4. Laziness:-
People may not want to put the effort needed to formulate
a plan.

5. Over Confidence:-
As individual a most expensive, they may rely less on
formalized planning. Rarely, however is this
 appropriate. Being over confidence and over
smarting experience can bring demise. Forethought
is rarely work and is often the mark of
professionalism.

6. Under Confidence:-
People may have had a previous bad experience
with planning that is case in which have been long,
cumbersome, impractical or inflexible- planning like
anything else can be done badly.

7. Poor Timing:-
People may sincerely believe the plan is wrong. They
may view the situation from a different view point or they
may have aspirations for themselves or the organization
that are different from the plan. Different people in
different jobs have different perceptions of a situation.

8. Self Interest:-
When some people has achieved status, privilege or
self-esteem through effectively using an old system he
or she often sees a new plan as a threat.

9. Fear of Failure:-
By not taking action, there is a little risk of failure
unless a problem is urgent and pressing whenever
something worthwhile is attempted there is some
risk of failure.

10. Fear of Unknown:-

People may be uncertain of their abilities to learn
new skills of their aptitude with new systems or of
their ability to take on new roles.
 ASSIGNMENT NO. 4
a) Define the following terms in four line.

VISION:-
Defines the desired or intended future state of an organization or enterprise in
terms of its fundamental objective and/or strategic direction. Vision is a long term
view, sometimes describing how the organization would like the world in which it
operates to be. For example a charity working with the poor might have a vision
statement which read "A world without poverty".

MISSION:-
A mission statement is a formal, short, written statement of the purpose of a
company or organization. The mission statement should guide the action of the
organization, spell out it overall goal, provide a sense of direction and guide
decision making. It provides the framework or context within which the
company’s strategy is formulated.

OBJECTIVES:-
Mission, purpose or standard that can be reasonable achieved within the
expected time frame and with the available resources objectives contribute to
the fulfillment of specified goal.
b) What are the mission statement component.

COMPONENTS OF MISSION STATEMENT

No one can deny the importance of a mission statement in motivating a business. Mission
statement not only helps the business to remain its track but also help determining the
very purpose of its existence. Finding a project mission statement is never possible. There
are ten elements which involves in making a mission statement. Each good mission
statement incorporates all of these elements in it. These elements are:

a. Philosophy:-
Philosophy of a company is a much wider term to over. By defining
philosophy, the company defines its way of working its culture its beliefs
and how it sees work to be carried out. It is also an analytical way of
defining the norms on which it runs.

b. Self Concept:-
By defining the self concept the business is telling its heart out to the
world. In this the company shows the outside world, its core strength
and the place it sees itself in the future.

c. Public Image:-
Public image is a much wider term and can include not only the
corporate social responsibility but the overall impact of the action taken by
 the company on its image. This may include from minor issues like
installing manufacturing recycling plant by a company for pollution
reduction to improve its packaging to enhance a better brand image for
one of its top line brand.

d. Customer Focus:-
In this element, the organization mentions who are its customer or
potential customers. What will it do to serve them and how will its
customers find this organization different from the other
organization providing similar products or services in the market.

e. Product or Services:-
In mission statement a business has to mention the producer or
service or both they are providing. By defining products or service
the company distinguishes its offered product or services from
competitive products or services of similar nature provided by
other competitors in the market.

f. Markets:-
By defining markets, the company is declaring which type of customer
will be targeted or who will be the intended audience for which it will
produce products or services. For example a luxury car maker like Royal
Royce has a potential market of only the richest of the rich in the world.

g. Technology:-
By defining technology, the company tells its current technology use in
making of its products. It also tells about unique way in which its products
or services are technologically more advance then their alternatives.

h. Profitability:-
In this element the mission statement business defines, means it seeks to
survive in the longer run. It is not merely list them out but also defines
the logic behind them and how will the company strive to achieve them.

i. Employee Focus:-
This is also including the way in which the company will treat its
employees and how will it look towards this relationship in a
longer period of time.
j. Ethical Base:-
c) Discuss briefly any ten characteristics of mission statement.

CHARACTERISTICS OF MISSION STATEMENT

Broad Scope:-
The firms reason for existence and its purpose be wide and have
broader scope.

More than 250 Workers in the Organization:-

Organization having 250 or more
workers is medium sized
organization. Mission statement
reflects this particular characteristic.

Inspiring:-
Firm should reflect inspiring and interesting products/services as well as
environment.

Utility/Usefulness of Firm’s Product:-

Identify the utility of a firm’s product.

Firms Friendly Environment:-

Reveal the firm is environmentally responsible and
friendly the work place is controllable employees
behavior and strategies adopt are good.
 Environment Ending:-
Reveal that firm is socially responsible.

Encompassing 10 Components of Mission Statement:-

Include components such as
customer, product or
services, market,
technologies, profitability,
employees focus, ethical
base, philosophy, self
concept and public image.

ASSIGNMENT NO. 5

Q) Discuss briefly the external environment factors.

EXTERNAL ENVIRONMENT FACTORS

Competitors:-
Any person or entity which is a rival against another. In business
a company is the same industry or a similar industry which offers a similar
product or service. Competition also requires becoming more efficient in
order to reduce cost.

Suppliers:-
Suppliers are individual or business that provide goods or services
to vendor in return for the agreed upon compensation. As such suppliers do
not generally intact with consumers directly, learning that task to vendor or
shop owners.

Distributors:-
Entity that buys non-competing products or product-lines,
warehouses them, and resells them to retailers or direct to the end users or
customers. Most distributors provide strong manpower and cash support to
the supplier or manufacturer's promotional efforts. They usually also provide
a range of services (such as product information, estimates, technical
support, after-sales services, credit) to their customers.

Creditors:-
An entity (person or institution) that extends credit by giving another
entity permission to borrow money if it is paid back at a later date. Creditors
can be classified as either "personal" or "real". Those people who loan
money to friends or family are personal creditors. Real creditors (i.e. a bank
or finance company) have legal contracts with the borrower granting the
lender the right to claim any of the debtor's real assets (e.g. real estate
or car) if he or she fails to pay back the loan.

Customers:-
A customer (also known as a client, buyer, or purchaser) is usually
used to refer to a current or potential buyer or user of the products of an
individual or organization, called the supplier, seller, or vendor. This is
typically through purchasing or renting goods or services

Employees:-
An employee contributes labor and expertise to an endeavor.
Employees perform the discrete activity of economic production. Of the three
factors of production, employees usually provide the labor.

Specifically, an employee is any person hired by an employer to do a

specific "job". In most modern economies, the term employee refers to a
specific defined relationship between an individual and a corporation, which
differs from those of customer, or client.

Managers:-
An individual who is in charge of a certain group of tasks, or a certain
subset of a company. A manager often has a staff of people who report to
him or her. As an example, a restaurant will often have a front-of-house
manager who helps the patrons, and supervises the hosts. In addition, a
specific office project can have a manager, known simply as the project
manager. Certain departments within a company designate their managers
to be line managers, while others are known as staff managers, depending
upon the functionality of the department.

Stockholders:-
One who owns shares of stocks in a corporation or mutual fund.
For corporation along with the ownership come a right to declared dividend
and the right to vote on certain company matters including the board of
directors also called shareholders.

Labor Union:-
Labor union (American English) is an organization of workers that
have banded together to achieve common goals such as better working
conditions. The trade union, through its leadership, bargains with the
employer on behalf of union members (rank and file members) and
negotiates labour contracts (collective bargaining) with employers. This may
include the negotiation of wages, work rules, complaint procedures, rules
governing hiring, firing and promotion of workers, benefits, workplace safety
and policies.

Trade Association:-
An industry trade group also known as a trade association or
sector association. On industry trade association participates in public
relations activities such as advertising, education, political donations,
lobbying but main focus is collaborations between companies.

Special Interest Group:-

A Special Interest Group (SIG) is a community with an
interest in advancing a specific area of knowledge, learning or technology
where members cooperate to effect or to produce solutions within their
particular field, and may communicate, meet, and organize conferences.

Government:-
A government is the organization, or agency through which a
political unit exercises its authority, controls and administers public policy,
and directs and controls the actions of its members or subjects.
Community:-
A community is a group of interacting species sharing a populated
environment. In human communities, intent, belief, resources, preferences,
needs, risks, and a number of other conditions may be present and common,
affecting the identity of the participants and their degree of cohesiveness.

Products/ Services Market:-

A market used to exchange a final goods or service
product markets exchange consumer goods purchased by the business
sector and goods purchased by government and foreign sector same as in
the case of service market.

Natural Environment:-
The natural environment, encompasses all living and non-
living things occurring naturally on Earth or some region thereof. It is an
environment that encompasses the interaction of all living species.

P E S T Culture

“P” Political Factor:-

Political factors are how and to what degree a government intervenes in the
economy. Specifically political factor include areas such as tax policy, tariffs
and political stability. Furthermore government make infrastructure of a
nation.
“E” Economic Factor:-
In the economic factor, the organizational analysis should centre on those
aspects of the economic system that directly impact the type of project
being considered. For example, inflation, labour laws, and opportunity costs
for researchers in public institutions directly impact organizational activities.
Clearly, a country under a structural adjustment regime or one that is
expecting to undergo restructuring presents an investment. Countries with
foreign currency restrictions represent different environments for institutions
than countries without them, for such restrictions have ramifications for
research, e.g. for equipment procurement and maintenance.

“S” Social and Cultural Factor:-

Social and cultural forces at local, national, and often regional levels have
profound influence on the way organizations conduct their work and on what
they value in terms of outcomes and effects. For example, the mores of an
indigenous culture have a bearing on the work ethic and on the way in which
people relate to one another. Undoubtedly, the most profound cultural
dimension is language. The extent to which organizational members can
participate in the discourse of the major scientific language will determine
the extent to which research efforts focus inwardly or contribute to regional
and global research agendas. Understanding the national/regional/local
values toward learning and research provides insight into the type and
nature of research that is valued.

“T” Technology Factor:-

Both the types and the level of technology in the society give insight into
understanding an institution. Institutions dealing with Western paradigms are
dependent on the state of national infrastructure, e.g. power, water,
transport; those which concentrate on indigenous research paradigms may
have totally different dependencies. Thus, it is important to understand the
level of relevant technology in the institutional context and whether such
technology is defined by computer literacy or by highly developed
indigenous methods of verbal and nonverbal communication. It might also be
helpful for an assessment to include a consideration of the process by which
new technology comes into use, both to understand how difficult it is to
acquire needed research technologies and to develop an appreciation for the
society's willingness to embrace both new knowledge and change.
 ASSIGNMENT NO. 6

Q) Discuss briefly key internal forces /

factors.
Marketing:-
Marketing is the process by which companies create customer
interest in goods or services. It generates the strategy that underlies sales
techniques, business communication, and business developments.[1] It is an
integrated process through which companies build strong customer
relationships and create questionable value for their customers and for
themselves. These are the major parts of the marketing Customer, Supplier,
Contributors and product/ Services.

Finance Probability:-
Finance is the science of funds management. The general
areas of finance are business finance, personal finance, and public finance.
Finance includes saving money and often includes lending money. The field
of finance deals with the concepts of time, money, risk and how they are
interrelated. It also deals with how money is spent and budgeted.
One facet of finance is through individuals and business organizations, which
deposit money in a bank. The bank then lends the money out to other
individuals or corporations for consumption or investment and charges
interest on the loans.

Accounting:-
Accountancy is the process of communicating financial information
about a business entity to users such as shareholders and managers. The
communication is generally in the form of financial statements that show in
money terms the economic resources under the control of management; the
art lies in selecting the information that is relevant to the user and is reliable.
In accounting analyze the supplier cost, distribution cost, market cost,
consumer service cost and management cost.

Management:-
Management in all business areas and organizational activities
are the acts of getting people together to accomplish desired goals and
objectives efficiently and effectively. Management comprises planning,
organizing, staffing, leading or directing, and controlling an organization (a
group of one or more people or entities) or effort for the purpose of
accomplishing a goal. Resourcing encompasses the deployment and
manipulation of human resources, financial resources, technological
resources, and natural resources.

Management Information System (MIS):-

A management information system (MIS)
is a system or process that provides information needed to manage
organizations effectively. Management information systems are regarded to
be a subset of the overall internal controls procedures in a business, which
cover the application of people, documents, technologies, and procedures
used by management accountants to solve business problems such as
costing a product, service or a business-wide strategy. Management
information systems are distinct from regular information systems in that
they are used to analyze other information systems applied in operational
activities in the organization.

Production Operation:-
A firm focusing on a production orientation specializes in
producing as much as possible of a given product or service. Thus, this
signifies a firm exploiting economies of scale, until the minimum efficient
scale is reached. A production orientation may be deployed when a high
demand for a product or service exists, coupled with a good certainty that
consumer tastes do not rapidly alter (similar to the sales orientation).

Research & Development:-

The phrase research and development (R&D),
according to the Organization for Economic Co-operation and Development,
refers to "creative work undertaken on a systematic basis in order to
increase the stock of knowledge, including knowledge of man, culture and
society, and the use of this stock of knowledge to devise new applications".
Organizational Culture:-
Organizational culture is an idea in the field of
organizational studies and management which describes the psychology,
attitudes, experiences, beliefs and values (personal and cultural values) of
an organization. It has been defined as "the specific collection of values and
norms that are shared by people and groups in an organization and that
control the way they interact with each other and with stakeholders outside
the organization."

Organizational Ethics:-
Organizational Ethics is the ethics of an organization, and it
is how an organization ethically responds to an internal or external stimulus.
Organizational ethics is interdependent with the organizational culture.
Organizational ethics express the values of an organization to its employees
and/or other entities irrespective of governmental and/or regulatory laws

Organizational Social Responsibilities:-

Social responsibility is the principle that
companies should contribute to the welfare of society and not be solely
devoted to maximizing profits. This responsibility can be "negative",
meaning there is exemption from blame or liability, or it can be "positive,"
meaning there is a responsibility to act beneficently (proactive stance).
Corporate social responsibility (CSR), also known as corporate responsibility,
corporate citizenship, responsible business, sustainable responsible (SRB), or
corporate social performance is a form of corporate self-regulation
integrated into a business model.
 ASSIGNMENT # 07
a) Draw a line diagram showing level of strategies with person responsible for large
corporation and small companies?

Levels of Strategies – Large Company

Strategic leaders manage the strategic management process that is designed to help the
organization achieve its objectives.
Among the strategic leaders, we have managers operating at different levels of an organization:
corporate-level, business-level, functional-level and operational-level.

Corporate-level managers
• Corporate-level managers include the chief executive officer (CEO), senior executives
and the corporate staff. The corporate-level managers manage the strategic
management process for the whole organization. These managers may carry
designations such as CEO, managing director, executive director or president.
 Division Level –Division President-OR Executive Vice
President
• Business-level managers are the strategic leaders at the business, division or SBU levels.
These managers manage the strategic management process at the business-level. These
may carry designations such as general manager or vice-president.

Functional-level managers
• Functional-level managers are the strategic leaders of specific functions such as
marketing or operations. They are called marketing managers or operations managers.
The functional managers manage the strategic management process at the functional
level.

Operational-level
• At the operational-level, there are managers who are responsible for the implementation
of strategies within their assigned functional areas. They occupy positions such as deputy
manager of marketing or assistant manager of operations.

The Tasks of Strategic Leaders

Determining Strategic Direction One of the more crucial tasks of a strategic leader is to provide a sense
of direction to the organization. The strategic direction is concerned with the future shape of the
organization.

Effectively Managing the Organizational Resources Portfolio Strategic leaders are called upon to
manage effectively, the portfolio of organizational resources. Such a portfolio includes financial capital,
human capital, social capital and organizational capital.

Sustaining an Effective Organizational Culture Strategic leaders try to build and sustain an effective
organizational culture.

Emphasizing Ethical Practices Strategic leaders emphasize on ethical practices in word and deed
when the strategies are being implemented.

Establishing Balanced Organizational Controls Strategic leaders use a combination of financial and
non-financial controls to help the organization achieve its objectives.

The Roles of Strategic Leaders

Role of Chief Executive Officer: The role of the ceo is evident through all the
phases of the process of strategic management. A ceo performs the strategic tasks: actions which are
necessary to provide a direction to the organization so that it achieves its purpose. He plays a pivotal role
in setting the mission of the organizations, deciding the objectives and goals, formulating and
implementing the strategy and, in general, seeing to it that the organization does not deviate from its pre-
determined path, designed to move it from the position it is in to where it wants to be.

Role of Senior Managers: The senior (or top) management consists of managers at the
highest level of the managerial hierarchy. Senior managers perform a variety of roles by assigning the
board and the chief executive in the formulation, implementation and evaluation of strategy.
Organizationally, they come together in the form of different types of committees, task forces, work
groups, think tanks, management teams and the like, to play a very important role in strategic
management.

Role of Business-Level Executives: The rationale for organizing structure

according to the strategic business units (SBUs) is to manage a diversified company as a portfolio of
businesses – each business having a clearly defined product-market segment and a unique strategy. The
business-level executives, also known as either profit center or divisional heads are considered as chief
executives of a special business unit. The business-level strategy formulation and implementation are the
primary responsibilities of the business-level executives.

Role of Functional and Operational Managers: The major role of

functional and operational managers, also called the middle-level managers to relate to functional and
operational matters and therefore they rarely play an active role in higher-level strategic management.
They may, at best, be involved as ‘sounding boards’ for departmental and operational plans, as
implementers of the decision taken by the corporate- and business-level managers, followers of policy
guidelines and passive receivers of communication of functional strategic plans.

Levels of Strategies – Small Company

In small firms, the person primarily responsible for having effective strategies at
the various level include the business owner or president at the company level and
then the same range of persons at the lower tow level as with a large firm.

It is important to note that all persons responsible for strategic planning at the
various levels ideally participate and understand the strategies at the other
organizational levels to help ensure coordination, facilitation and commitment while
avoiding inconsistency.
 b) Draw a table showing the alternative strategie
s & the following areas.

Forward Integration
Definition: Gaining ownership or increased control over distributors or retailers.
Example: Southwest Airlines just began selling tickets through Galileo.

Backward Integration
Definition: Seeking ownership or increased control of a firm’s suppliers.
Example: Hilton Hotels could acquire a large furniture manufacturer.

Horizontal Integration
Definition: Seeking ownership or increased control over competitors.
Example: Huntington Bancshares and Sky Financial Group in Ohio merged.

Market Penetration
Definition: Seeking increase market share for present products or services in
present market through greater marketing efforts.
Example: McDonald’s is spending millions on its “Shrek the Third” promotions aimed
at convincing consumers it offers healthy items.

Market Development
Definition: Introducing present products or service into new geographic areas.
Example: Burger king opened its first restaurant in Japan.

Product Development
Definition: Seeking increased sales by improving present products or services or
developing new ones.
Example: Google introduced “Google Presents” to compete with Microsoft’s
PowerPoint.

Related Diversification
Definition: Adding new but related products and services.
Example: MGM Mirage is opening its first non casino luxury hotel.

Unrelated Diversification
Definition: Adding new, unrelated products and services.
Example: Ford Motor Company entered the industrial bank business.

Retrenchment
Definition: Regrouping through cost and asset reduction to reverse declining sales
and profit.
Example: Discovery Channel closed its 103 mall-based and stand-alone stores to
focus on the internet and laid off 25% of its workforce.

Divestiture
Definition: Selling a division or part of an organization.
Example: Whirlpool sold its struggling Hoover floor-care business to Techtronic
Industries.

Liquidation
Definition: Selling all of a company’s assets, in parts, for their tangible worth.
Example: Follow Me Charters sold all of its assets and ceased doing business.

ASSIGNMENT # 08
Q) Draw a line diagram showing strategy formulation analytical frame
work discuss briefly?

THE STRATEGY FORMULATION ANALYTICAL FRAMEWORK

STAGE 1: THE INPUT STAGE

EXTERNAL FACTOR COMPPETITIVE INTERNAL

EVALUATION (EFE) PROFILE EVALUATION
MATRIX MATRIX (CPM) (IFE) MATRIX

STAGE 2: THE MATCHING STAGE

STRENGTHS STRATEGIC BOSTON INTERNAL GRAND

WEAKNESSES POSITION & CONSULTING EXTERNAL STRAT-
OPPORTUNITIES ACTION GROUP (IE) EGY
THREATS EVALUATION (BCG) MATRIX MATR-
(SWOT) MATRIX (SPACE) MATRIX IX
MATRIX

STAGE 3: THE DECISION STAGE

QUANTATIVE STRATEGIC PLANNING MATRIX (QSPM)

A Comprehensive Strategy-Formulation Framework:

STAGE ONE:
THE INPUT STAGE
A. The Input Stage includes the External Factor Evaluation (EFE) Matrix, the Competitive
Profile Matrix (CPM), and the Internal Factor Evaluation (IFE) Matrix.

B. Procedures for developing an EFE Matrix, an IFE Matrix, and a CPM were presented in
earlier documents.
 C. The input tools require strategists to quantify subjectively during early stages of the
strategy-formulation process. Making small decisions in the input matrices regarding the
relative importance of external and internal factors allows strategists to generate and
evaluate alternative strategies more effectively.

STAGE TWO:
THE MATCHING STAGE
A. The Matching Stage
1. The Matching Stage includes the Threats-Opportunities-Weaknesses-Strengths
(TOWS) Matrix, the Strategic Position and Action Evaluation (SPACE) Matrix, the
Boston Consulting Group (BCG) Matrix, the Internal-External (IE) Matrix, and the
Grand Strategy Matrix.
2. Any organization, whether military, product-oriented, service-oriented, governmental,
or even athletic must develop and execute good strategies to win.

B. The TOWS Matrix

1. The TOWS Matrix is an important matching tool that helps managers develop four
types of strategies:
a. SO strategies—use a firm’s internal strengths to take advantage of external
opportunities.
b. WO strategies—are aimed at improving internal weaknesses by taking advantage
of external opportunities.
c. ST strategies—use a firm’s strengths to avoid or reduce the impact of external
threats.
d. WT strategies—are defensive tactics directed at reducing internal weaknesses and
avoiding external threats.
2. A schematic representation of the TOWS Matrix is provided in the other planning
documents.

3. There are eight steps to construct a TOWS Matrix:

a. List the firm’s key external opportunities.

b. List the firm’s key external threats.
c. List the firm’s key internal strengths.
d. List the firm’s key internal weaknesses.
e. Match internal strengths with external opportunities and record the resulting SO
strategies in the appropriate cell.
f. Match internal weaknesses with external opportunities and record the resulting
WO strategies.
g. Match internal strengths with external threats and record the resultant ST
strategies.
h. Match internal weaknesses with external threats and record the resulting WT
strategies.
C. The SPACE Matrix
1. The SPACE Matrix, another important Stage 2 matching tool. Its four-quadrant
framework indicates whether aggressive, conservative, defensive, or competitive
strategies are more appropriate for a given organization.
2. Depending on the type of organization, numerous variables could make up each of the
dimensions represented on the axes of the SPACE Matrix.

3. The steps to develop a SPACE Matrix:

a. Select a set of variables to define financial strength (FS), competitive advantage

(CA), environmental stability (ES), and industry strength (IS).
b. Assign a numerical value ranging from 1 (worst) to 6 (best) for the variables that
make up the FS and IS dimensions. Assign a number between –1 (best) to –6
(worst) for variables that make up the ES and CA dimensions.
c. Compute an average score for FS, CA, IS, and ES by summing the values given to
the variables and dividing by the number of variables included in each dimension.
d. Plot the average scores for FS, IS, ES, and CA on the appropriate axis in the
SPACE Matrix.
e. Add the two scores on the x-axis and plot the resultant point on X. Add the two
scores on the y-axis and plot the resultant point on Y. Plot the intersection of the
new xy point.
f. Draw a directional vector from the origin of the SPACE matrix through the new
intersection point. This vector reveals the type of strategies recommended for the
organization.

1. Aggressive
2. Competitive
3. Defensive
4. Conservative

D. The BCG Matrix

1. The BCG Matrix graphically portrays differences among divisions (of a firm) in terms
of relative market share position and industry growth rate.
2. The BCG Matrix: Divisions in the respective circles in the BCG Matrix are called
question marks, stars, cash cows, and dogs.
3. The four quadrants represent the following:
 a. Question Marks—Divisions in Quadrant I have a low relative market share
position, yet compete in a high-growth industry. Generally these firms’ cash needs
are high and their cash generation is low.
b. Stars—Quadrant II businesses represent the organization’s best long-run
opportunities for growth and profitability. These businesses have a high relative
market share and compete in high growth rate industries.
c. Cash Cows—Divisions positioned in Quadrant III have a high relative market
position, but compete in a low-growth industry. Called cash cows because they
generate cash in excess of their needs.
d. Dogs—Quadrant IV divisions of the organization have a low relative market share
position and compete in a slowed or no-growth industry; they are Dogs in a firm’s
portfolio.
E. The IE Matrix.
1. The IE Matrix positions an organization’s various divisions in a nine-cell display.
2. The IE Matrix is similar to the BCG Matrix in that both tools involve plotting
organization divisions in a schematic diagram; this is why they are called portfolio
matrices.

3. Differences between the IE Matrix and the BCG Matrix

a. Axes are different
b. IE Matrix requires more information about divisions than BCG
c. Strategic implications of each matrix are different
F. The Grand Strategy Matrix
1. In addition to the TOWS Matrix, SPACE Matrix, BCG Matrix, and IE Matrix, the
Grand Strategy Matrix has become a popular tool for formulating alternative
strategies. All organizations can be positioned in one of the Grand Strategy Matrix’s
four strategy quadrants.
2. The Grand Strategy Matrix is pictured in the other planning documents.

3. It is based on two evaluative dimensions: competitive position and market growth.

STAGE THREE:

THE DECISION STAGE

A. The Quantitative Strategic Planning Matrix (QSPM)
1. Other than ranking strategies to achieve the prioritized list, there is only one analytical
technique in the literature designed to determine the relative attractiveness of feasible
alternative actions.
 2. This technique is the QSPM, which comprises Stage 3 of the strategy-formulation
analytical framework. This technique objectively indicates which alternative strategies
are best.

Six steps to developing a QSPM:

a. Make a list of the firm’s key external opportunities/threats and internal

strengths/weaknesses in the left column of the QSPM.
b. Assign weights to each key external and internal factor.
c. Examine the Stage 2 matrices and identify alternative strategies that the
organization should consider implementing.
d. Determine the Attractiveness Scores (AS).
e. Compute the total AS.
f. Compute the sum Total AS.
B. Positive Features and Limitations of the QSPM
1. A positive feature of the QSPM is that sets of strategies can be examined sequentially
or simultaneously. Another positive feature of the QSPM is that it requires strategists
to integrate pertinent external and internal factors into the decision process.
Developing a QSPM makes it less likely that key factors will be overlooked or
weighted inappropriately.
2. The QSPM is not without some limitations. First, it always requires intuitive
judgment. Second, it can only be as good as the prerequisite information and
matching analyses upon which it is based.
 ASSIGNMENT # 09
a) Discuss the factors involved in strategy formulation and
implementation?

The Strategy Formulation and Implementation

The strategy-implementation stage of strategic management is revealed. Successful strategy
formulation does not guarantee successful strategy implementation. It is always more difficult to
do something (Strategy implementation) than to say you are going to do it (strategy formulation)!
Although inextricably linked, strategy implementation is fundamentally different from strategy
formulation. Strategy formulation and implementation can be contrasted in the following ways

Ways of Strategy Formulation and Implementation

1) Strategy formulation is positioning forces before the action.

2) Strategy implementation is managing forces during the action.

3) Strategy formulation focuses on effectiveness.

4) Strategy implementation focuses on efficiency.

5) Strategy formulation is primarily an intellectual process.

6) Strategy implementation is primarily an operational process.

7) Strategy formulation requires good intuitive and analytical skills.

8) Strategy implementation requires special motivation and leadership skills.

9) Strategy formulation requires coordination among a few individuals.

10) Strategy implementation requires coordination among many individuals.

Strategy-formulation concepts and tools do not differ greatly for small, large, for profit, or
nonprofit organizations. However, strategy implementation varies substantially among different
types and sizes of organizations. Implementing strategies requires such actions as altering sales
territories, adding new departments, closing facilities, hiring new employees, changing an
organization's pricing strategy, developing financial budgets, developing new employee benefits,
establishing cost-control procedures, changing advertising strategies, building new facilities,
training new employees, transferring managers among divisions, and building a better computer
information system. These types of activities obviously differ greatly between manufacturing,
service, and governmental organizations.
Strategy Implementation in Management Perspectives
In all but the smallest organizations, the transition from strategy formulation to strategy
implementation requires a shift in responsibility from strategists to divisional and functional
managers. Implementation problems can arise because of this shift in responsibility, especially if
strategy-formulation decisions come as surprise to middle- and lower-level managers. Managers
and employees are motivated more by perceived self-interests than by organizational interests,
unless the two coincide. Therefore, it is essential that divisional and functional managers be
involved as much as possible in strategy-formulation activities. Of equal importance, strategists
should be involved as much as possible in strategy-implementation activities.

ASSIGNMENT # 09
b) Draw a line diagram showing relationship between the strategy and
structure discuss briefly?

Chandler’s Strategy-Structure Relationship

New Strategy is New Administrative Organizational

formulated Problems emerge Performance Declines

Organizational New Organizational

Performance Improves Structure is established
EXPLANATION:
Chandler is a historian of business and strategy and structure is framed around four historical case studies
and additional context that are designed to argue for a model of organizational structure following
organizational strategy. The book focuses on the examples of du Pont, General Motors, Standard Oil of
New Jersey, and Sears.

Chandler's core argument is that a large number of companies adopted a multi-divisional form (M-Form)
as the form of organizations independently of each other and without coordination because they had
become to adopt a business strategy that required that organizational form.

Chandler defines strategy as the determination of the basic long term goals and objectives and the
adoption of courses of action and the allocation of resources necessary for carrying out goals. He defines
structure as the design of the organization through which the business is administered including the lines
of authority and communication and the data that flows through these lines.

Chandler argues that every group in his study had, often driven by pressures of others, followed through a
set of steps independently of each other:

• Gathered resources from employees and resources through growth or acquisition.

• Established new structures in order to increase efficiency.
• Adopted a growth strategy that involved diversification into new markets with new products in
order to overcome limits in the initial market.
• Created the (at that point new) form to management that was the M-Form in order to manage the
new large diversified companies in a manner that was more efficient than a simple holding
company.

The results were set of a structure which was different in details but fundamentally similar as well.
Chandler suggested that these changes and the needs for this process (and the similar outcome) was
driven by a series of technological and market changes that included the growth of transportation and
communication networks that made increased coordination possible (and profitable) and necessary to
compete.

In a way of supporting his basic structure follows strategy argument, he argued that the forms themselves
were a product of a particular strategic context of management.

Theoretical and practical relevance:

Consulting and management scholars have made frequent use of Chandler. They argue that firms should
choose a basic design for an organization and modify the design to fit changing strategic situations.
 ASSIGNMENT NO # 10

Q) Discuss the various factors affecting the implementation

strategies?

a) Strategic Areas:
 Finance
 Accounting
 Human Resources

Finance:
The Finance and Strategic Management concentration gives you state of the art
analytical techniques and approaches to assist in financial and strategic decisions.
The concentration provides the necessary insight and skills to determine, whether
these decisions are appropriate in an overall strategic context.

Accounting:
Strategic Management Accounting has been defined as "a form of management
accounting in which emphasis is placed on information which relates to factors
external to the firm, as well as non-financial information and internally generated
information."

Human Resources:
Strategic human resource management is designed to help companies best meet
the needs of their employees while promoting company goals. Human resource
management deals with any aspects of a business that affects employees, such as
hiring and firing, pay, benefits, training, and administration. Human resources may
also provide work incentives, safety procedure information, and sick or vacation
days.

Strategic human resource management is the proactive management of people. It

requires thinking ahead, and planning ways for a company to better meet the needs
of its employees, and for the employees to better meet the needs of the company.
This can affect the way things are done at a business site, improving everything
from hiring practices and employee training programs to assessment techniques
and discipline.

b) Competitors Analysis:
 Production
 Marketing
 R &D

Production:
 Planning, implementation, and control of industrial production processes to
ensure smooth and efficient operation. Production management techniques
are used in both manufacturing and service industries. Production
management responsibilities include the traditional “five M's”: men and
women, machines, methods, materials, and money. Managers are expected
to maintain an efficient production process with a workforce that can readily
adapt to new equipment and schedules.

Marketing:
In the present competitive business environment, organizations that develop and
implement effective marketing strategies can create more value for their
customers. An effective marketing strategy provides direction, improves the brand
image, helps in developing the right goals and enhances the overall performance of
an organization. For developing effective marketing strategies, the organization has
to first decide the customer segments it wants to serve, the customer needs it
wants to fulfill and establish the price that the customers are willing to pay for its
products and services. Strategic marketing management is all about helping the
organization develop a unique identity in the market, grow its businesses
geographically and serve the customers better than the competitors. Strategic
marketing is a continuous process of developing marketing strategies taking into
consideration the constantly evolving trends in the business environment and by
giving utmost importance to customer satisfaction.

R &D:
Strategic R&D Management programmed you will look at how organizations
make product innovation happen, and examine how senior managers engage in and
support product innovation in a way that supports – rather than dissipates – the
thrust of their business strategy. Strategic R&D Management programmed has
been constantly evolving, consistently remaining at the forefront of product
development business concern.

C) Contemporary:

 MIS
 Customer Relation

M.I.S:
MIS is an integrated information system, which is used to provide
management with needed information on a regular basis.
The term system in MIS implies ORDER, ARRANGEMENT, and
PURPOSE.
The information can be used for various purposes,
-strategic planning
-delivering increased productivity
-reducing service cycles
-reducing product development cycles
-reducing marketing life cycles
-increasing the understanding of customers' needs
-facilitating business and process re-engineering.

MIS can also be used across the organization as an information

utility to
-support policy making
-meet regulatory and legislative requirements
-support research and development
-support consistent and rapid decision making
-enable effective and efficient utilization of resources
-provide evidence of business transactions
-identify and manage risks
-evaluate and document quality, performance and achievements.

Customer Relation:
Customer relationship management (CRM) is a widely-implemented strategy
for managing a company’s interactions with customers, clients and sales prospects.
Customer relationship management describes a company-wide business strategy
including customer-interface departments as well as other departments. The overall
goals are to find, attract, and win new clients, nurture and retain those the company
already has, entice former clients back into the fold, and reduce the costs of
marketing and client service.
 ASSIGNMENT # 11
b) Define the following terms:

• Strategy Review
• Strategy Evaluation
• Strategy Control

 Strategy Review:
As owner-manager of your business or as a member of its management
team, you should stand back once in a while and review your business'
performance. The areas you need to look at are:

• Your market performance and direction - how well you are

performing through your sales results, which markets to aim for next
and how to improve your performance.
• Your products and services - how long your existing products will
meet your customers' needs and any plans for renewal.
• Operational matters - your premises, your methods, and
technologies used your processes, IT and quality. Are there any
internal issues that are holding your business back?
• Financial matters - how your business is financed, levels of retained
profit, the sales income generated and your cashflow.
• Your organisation and your people - your structures, people
planning issues, training and development.
 Strategy Evaluation:
Strategy evaluations concerned primarily with traditional controls processes
which involves the review and feedback of performance to determine if
plans, strategies, and objectives are being achieved, with the resulting
information being used to solve problems or take corrective actions.

 Strategy Control:
"Strategic control focuses on the dual questions of whether (1) the strategy is being implemented
as planned; and (2) the results produced by the strategy are those intended."

This definition refers to the traditional review and feedback stages which constitutes the last step
in the strategic management process. Normative models of the strategic management process
have depicted it as including there primary stages: strategy formulation, strategy implementation,
and strategy evaluation (control).

b) Draw a line diagram showing the strategy evaluation frame

work?

Strategy-Evaluation Framework
Internal Environment
Review External Environment

Significant Differences in Take Corrective

Yes
Targets Sets & Achieved Action Control

No

Measures Organization/Performance
Deficient
& Reward
REVIEWING BASES OF STRATEGY
Reviewing the underlying bases of an organization's strategy could be
approached by developing a revised EFE
Matrix and IFE Matrix. A revised IFE Matrix should focus on changes in the
organization's management,
marketing, finance/accounting, production/operations, R&D, and computer
information systems strengths and weaknesses. A revised EFE Matrix should
indicate how effective a firm's strategies have been in response to key
opportunities and threats. This analysis could also address such questions as
the following:
1. How have competitors reacted to our strategies?
2. How have competitors' strategies changed?
3. Have major competitors' strengths and weaknesses changed?
4. Why are competitors making certain strategic changes?
5. Why are some competitors' strategies more successful than others?
6. How satisfied are our competitors with their present market positions and
profitability?
7. How far can our major competitors be pushed before retaliating?
8. How could we more effectively cooperate with our competitors?
Numerous external and internal factors can prohibit firms from achieving
long-term and annual objectives. Externally, actions by competitors, changes
in demand, changes in technology, economic changes, demographic shifts,
and governmental actions may prohibit objectives from being accomplished.
Internally, ineffective strategies may have been chosen or implementation
activities may have been poor.
Objectives may have been too optimistic. Thus, failure to achieve objectives
may not be the result of unsatisfactory work by managers and employees.
All organizational members need to know this to encourage their support for
strategy-evaluation activities. Organizations desperately need to know as
soon as possible when their strategies are not effective. Sometimes
managers and employees on the front line discover this well before
strategists.

External opportunities and threats and internal strengths and weaknesses

that represent the bases of current strategies should continually be
monitored for change. It is not really a question of whether these factors will
change, but rather when they will change and in what ways. Some key
questions to address in evaluating strategies are given here.
1. Are our internal strengths still strengths?
2. Have we added other internal strengths? If so, what are they?
3. Are our internal weaknesses still weaknesses?
4. Do we now have other internal weaknesses? If so, what are they?
5. Are our external opportunities still opportunities?
6. Are there now other external opportunities? If so, what are they?
7. Are our external threats still threats?
8. Are there now other external threats? If so, what are they?
9. Are we vulnerable to a hostile takeover?

Measuring Organizational Performance

Another important strategy-evaluation activity is measuring organizational
performance. This activity includes comparing expected results to actual
results, investigating deviations from plans, evaluating individual
performance, and examining progress being made toward meeting stated
objectives. Both long-term and
annual objectives are commonly used in this process. Criteria for evaluating
strategies should be measurable and easily verifiable. Criteria that predict
results may be more important than those that reveal what already has
happened. For example, rather than simply being informed that sales last
quarter were 20
percent under what was expected, strategists need to know that sales next
quarter may be 20 percent below standard unless some action is taken to
counter the trend. Really effective control requires accurate forecasting.
Failure to make satisfactory progress toward accomplishing long-term or
annual objectives signals a need for corrective actions. Many factors, such as
unreasonable policies, unexpected turns in the economy, unreliable suppliers
or distributors, or ineffective strategies, can result in unsatisfactory progress
toward meeting objectives. Problems can result from ineffectiveness (not
doing the right things) or inefficiency
(doing the right things poorly). 151
Determining which objectives are most important in the evaluation of
strategies can be difficult. Strategy evaluation is based on both quantitative
and qualitative criteria. Selecting the exact set of criteria for evaluating
strategies depends on a particular organization's size, industry, strategies,
and management philosophy. An organization pursuing a retrenchment
strategy, for example, could have an entirely
different set of evaluative criteria from an organization pursuing a market-
development strategy. Quantitative criteria commonly used to evaluate
strategies are financial ratios, which strategists use to make three critical
comparisons: (1) comparing the firm's performance over different time
periods, (2)
comparing the firm's performance to competitors', and (3) comparing the
firm's performance to industry averages. Some key financial ratios that are
particularly useful as criteria for strategy evaluation are as
follows:
1. Return on investment
2. Return on equity
3. Profit margin
4. Market share
5. Debt to equity
6. Earnings per share
7. Sales growth
8. Asset growth
But there are some potential problems associated with using quantitative
criteria for evaluating strategies.
First, most quantitative criteria are geared to annual objectives rather than
long-term objectives. Also, different accounting methods can provide
different results on many quantitative criteria. Third, intuitive judgments are
almost always involved in deriving quantitative criteria. For these and other
reasons, qualitative criteria are also important in evaluating strategies.
Human factors such as high absenteeism and
turnover rates, poor production quality and quantity rates, or low employee
satisfaction can be underlying causes of declining performance. Marketing,
finance/accounting, R&D, or computer information systems factors can also
cause financial problems.

Taking Corrective Actions

The final strategy-evaluation activity, taking corrective actions, requires making changes to
reposition a firm competitively for the future. Examples of changes that may be needed are
altering an organization's structure, replacing one or more key individuals, selling a division, or
revising a business mission. Other changes could include establishing or revising objectives,
devising new policies, issuing stock to raise capital, adding additional salespersons, allocating
resources differently, or developing new performance
incentives. Taking corrective actions does not necessarily mean that existing strategies will be
abandoned or even that new strategies must be formulated.
The probabilities and possibilities for incorrect or inappropriate actions increase geometrically
with an arithmetic increase in personnel. Any person directing an overall undertaking must check
on the actions of the participants as well as the results that they have achieved. If either the
actions or results do not comply with preconceived or planned achievements, then corrective
actions are needed. No organization can survive as an island; no organization can escape change.
Taking corrective actions is necessary to keep an organization on track toward achieving stated
objectives. Corrective actions should place an organization in a better position to capitalize upon
internal strengths; to take advantage of key external opportunities; to avoid, reduce, or mitigate
external threats; and to improve internal weaknesses. Corrective actions should have a proper
time horizon and an appropriate amount of risk. They should be internally consistent and socially
responsible. Perhaps most importantly, corrective actions strengthen an organization's
competitive position in its basic industry.