Different Types of Strategy

Presented by: Subhash Yadav Surbhi Singh Manish Singh Parihar Apeksha Parmar Sanjay Kumar Mallik

Content
Grand/Master Strategy Business Strategy Functional/Operational Strategy International Strategy

Grand/Master Strategy

Concentration
A strategic approach in which a business focuses on a single market or product. This allows the company to invest more resources in production and marketing in that one area. Zodiac brand concentrate on formal shirt for executives and professionals. Steel Authority of India Limited produces steel. Monsanto :Sector Seed Industry Products :High-yield crop varieties and Hybrid crops ,Net Profit (2008-09) Rs. 7,354 lacs.

Market Development
The expansion of the total market for a product or company by (1) entering new segments of the market, (2) converting nonusers into users, and/or (3) increasing usage per user. It was the arrival of low cost airlines Air Deccan that revolutionized the sector and air travel no longer the luxuries of business executive and the economically well off. Ready-to-eat Meals launched by ITC under brand name Aashirvaad is targeted towards those consumers who do not have time or willingness to prepare food.

Product Development
Ashok leyland has been a market leader in India s commercial vehicle industry. The company pioneered concept like full airbreaks, power steering, multi axle vehicle, rear engine and CNGpowered buses in India. Focus on providing better product and newer technology, they are the now the leading supplier of vehicles for the Indian military logistics operation. Sony has developed a framework and is to implementing measures on an ongoing basis to improve the quality of its products and services.

Innovation
Biocon Ltd has lined up many new brand launches across its six therapy baskets this fiscal; among them is a reusable insulin pen, branded Insupen, less painful jab for diabetics than their regular injection according to Mr Rakesh Bamzai, Biocon's PresidentMarketing. Insupen would be affordable in keeping with Biocon's philosophy of affordable innovation for the masses. Educomp bags NASSCOM foundation 'innovation' honours-The Financial Express (16-Feb-2010). Educomp has over the years focused on the use of technology to enhance the process of teaching-learning with the vision that education has the power to transform lives of our children and their families . They have open school such as The Millenium School, Euro Kids, Taxshila School.

Horizontal Integration
Horizontal integration occurs when a firm is being taken over by, or merged with, another firm which is in the same industry and in the same stage of production as the merged firm. HDFC Bank and Centurion Bank of Punjab (CBoP) merged on 23 March 2008 to form a bigger bank.

The merger of BSES (Bombay Suburban Electric Supply) Ltd. with Orissa Power Supply Company and and renamed as Reliance Energy(2002) which is now known as Reliance Infrastructure (2008). Merger of RIN & Surf excel

Vertical Integration
vertical integration is displayed by one firm engaged in different parts of production (e.g. growing raw materials, manufacturing, transporting, marketing, and/or retailing). Essar Steel Minnesota is part of Essar Steel, a global producer of steel with a footprint covering India, Canada, USA, Middle East and Asia. Essar Steel is a fully vertically integrated flat carbon steel manufacturer from iron ore to ready-to-market products.

Joint venture
NTPC BHEL Power Projects Private Limited (NBPPL) is a Joint Venture company of NTPC and BHEL, both Navaratna, public sector companies of GoI. NTPC-Bhel Power Projects was set up in 2008 to supply ancillary equipment and carry out engineering, procurement and construction contracts for power projects in India.

Concentration Diversification
This means that there is a technological similarity between the industries, which means that the firm is able to leverage its technical know-how to gain some advantage. For instance, the addition of tomato ketchup and sauce to the existing "Maggi" brand processed items of Food Specialties Ltd. is an example of concentric diversification. Nike used concentric diversification when it diversified from sports shoes to sports clothing and then to sports equipments.

Conglomerate Diversification
Type of diversification whereby a firm enters (through acquisition or merger) an entirely different market that has little or no synergy with its core business or technology. The Essar Group is a multinational conglomerate corporation in the sectors of Steel, Energy, Power, Communications, Shipping Ports & Logistics as well as Construction head quartered at Mumbai, India. The Aditya Birla Group is an Indian multinational conglomerate corporation headquartered in Mumbai, India. It operates in 33 countries with more than 133,000 employees worldwide. The group company s are Hindalco, Grasim, Aditya Birla Nuvo, Idea cellular and UltraTech Cement. After purchasing Columbian Chemicals

Co. the Group is now the largest manufacturer of Carbon Black worldwide.

Retrenchment/Turn around
Retrenchment is a corporate-level strategy that seeks to reduce the size or diversity of an organization's operations. It is also a reduction of expenditures in order to become financially stable. Nov 4, 2011: Computer chipmaker Advanced Micro Devices Inc. (AMD) said it plans to cut its global workforce by about 10 percent in a move to reduce operational costs. The layoff will occur across all functions globally and is expected to be completed by the end of the first quarter of 2012, the company said. About 300 Jet Airways employees, including cabin-crew, staged a protest outside the airline's office here on Wednesday against the management's move to retrench nearly 1,000 staffers. It is a part of handling economic slowdown and carefully rationalizing operations. (2008)

Divestment Strategies
A divestment strategy involves the sale of a portion of business, or a major division. Divestment is usually a part of rehabilitation or restructuring plan and is adopted when a turnaround has been attempted but has proved to be unsuccessful. By 1999, the whole Daewoo Group ran into financial trouble, and was forced to sell its automotive division. Candidates for the operation included Hyundai associated with DaimlerChrysler, Ford Motor Company and the GM-Fiat alliance. Finally, General Motors was the one who bought Daewoo Motor's assets.

L&T sold off its cement division to Kumar Mangalam Birla s Grasim industries. By selling off this division, L&T was better able to concentrate on its growth strategy of its core engineering business.

Liquidation
Take the book value of assets, subtract depreciation and sell the business. This may be hard for some companies to do because there may be untapped potential in the assets. Enron's European operations filed for bankruptcy on November 30, 2001, it was the biggest bankruptcy in U.S. history. Enron's party insolvency took the form of a liquidation, assets such as Enron's energy and bandwidth trading businesses, the Enron Wind energy unit, the IT consulting businesses, oil field services company Mariner Energy, and Enron's paper and forest products companies in the U.S. and Canada were sold. Empress Mills , a struggling textile mill within the Tata Group, was shut down and liquidated in 1986.

Functional Strategies
Every business unit develops functional strategies for each major department.. Financial Strategy Production Strategy Marketing Strategy Human Resources Strategy Management Information System Strategy

Financial Strategy
Financial Strategy is to select the main source of funding: the development of their own funds (profit, the issue of shares, etc.) or through debt financing (bank loans, bonds, commodity suppliers' credits, etc.). A big-bang initial public offer (IPO) of shares by Coal India Ltd closed with a thumping collection of Rs 236,148 crore, 15.2 times the targeted amount. Kingfisher Airlines has been asked to raise $160 million in equity by creditors. The Sahara group will give a loan of more than Rs 2.5 billion to cash-strapped Kingfisher Airlines, to help the carrier continue operations, the Times of India reported.

Focus Areas: emergency relief, education, health care, economic development, promotion of justice.

According to World Vision's 2006 Consolidated Financial Statements: Around 40% of their revenue comes from private sources, including individuals, World Vision clubs in schools, corporations and foundations. 27% comes from governments and multilateral aid agencies such as USAID and the Department for International Development (DFID) in the UK. 30% comes from other World Vision programs and gift in Kind, typically food commodities, medicine, and clothing donated through corporations and government agencies.

Production Strategy
Production strategy defines what the company produces itself, and that purchases from suppliers or partners, that is, how far worked out the production chain. P&G reputation as a great marketing company is matched by its excellence as a manufacturing company. P&G spends large sums developing and improving production operations to keep its costs among the lowest in Industry. Tata is also changing manufacturing practices. That s because the auto maker is asking engineers and mechanics to join together to set up their own assembly operations to build the Nano.

Marketing Strategy
We've increased our annual marketing budget substantially, launched many new products, and developed a model to help our retail customers maximize their sales while we continue to plan for the next one, five and ten years in business. Coca-cola Baseline : Taste of India Amul has used the hoardings and advertising to perfection. Taking cues from new films, celebrities, the creatives are fun to watch. More over Amul has sticked with the creative messages throughout.

HR strategy
The Bank has continued to lay great emphasis on human resource development, to make its employees attain global standards in productivity, thereby maximising value creation for its stakeholders. The employees attend training programmes , both domestic and overseas, and the average training per person was 37 hours, which meets international benchmarks. TCS BPO bags HR excellence honors at Asia s Best Employer Brand Awards 2010. It received the Award for Talent Management, Award for Excellence in HR through Technology, Award for Continuous Innovation in HR Strategy at Work, Award for Innovation in Recruitment, Award for Innovative Retention Strategy and Award for Excellence in Training.

Management Information System

In HDFC with the help of INFORMATION SYSTEM the daily transactions are recorded in branch computers and these branch computers are then connected to the main head office server. Due to IS employees can easily connect with other branches, customer service get improved, online banking emerged and lot of others benefits. Jharkhand Gramin Bank, Project Gram SHAKTI: introduction and implementation of Core Banking Solution to connect and inter-link all 217 branches. This technological initiative shall also improve Management Information System (MIS) as it will become possible to access and consolidate data from central locations like the Head Office as well as from Regional Offices.

Business Strategies

Cost Leadership
It describes a way to establish the competitive advantage. Cost leadership, in basic words, means the lowest cost of operation in the industry. A cost leadership strategy aims to exploit scale of production, well defined scope and other economies (e.g. a good purchasing approach) , producing highly standardized products, using high technology.

RIN ADVANCED DET.POWDER 1KG Rs.67.00

WHEEL ACTIVE LEMON & JASMINE 975G Rs.30.00

Differentiation
It is the process of distinguishing a product or offering from others, to make it more attractive to a particular target market. This involves differentiating it from competitors' products as well as a firm's own product offerings. Extra money for extra benefit.

Lakme sunscreen with different SPFs

DOVE BREAKAGE THERAPY CONDITIONER

DOVE DAILY THERAPY CONDITIONER

Focus
The firm can choose to compete in a defined, focused market segment with a narrow scope. Narrow/niche/segment ;demography geography, lifestyles

BRITANNIA CREAM CRACKER

BRITANNIA NUTRICHOICE

SAFFOLA GOLD OILS

International Strategy

Export

Chinese electronic products

Joint Venture

Maruti Udyog Ltd. (India)+ Suzuki(Japan)

Tata Teleservices + NTT Docomo (Japan)

Manufacturing
Good CSR policies, eco-friendly technology usage, other environmental initiatives like pollution control etc.

Hyundai's manufacturing plant at Irungattukottai near Sriperumbudur.

Acquisition

Is now

Turnkey operations
 Reynold India Pvt. Limited specializes in undertaking global turn key projects for setting up of chilling plants & chilled water systems.  Scope of Work Preparation of preliminary reports Framing technical specifications Preparation of drawings and site layouts Equipment selection Foundation drawings Design & Manufacturing Erection & Commissioning Training of people at site for operating in plants

Strategic Alliance
A Strategic Alliance is a relationship between two or more parties to pursue a set of agreed upon goals or to meet a critical business need while remaining independent organizations. Nokia and Microsoft enter strategic alliance on Windows Phone, Bing, and more. American Airlines, British Airways and Spanish flag-carrier Iberia have signed a long-awaited strategic alliance that will see them cooperate on flights between Europe and North America. (2010) The deal worth approximately 4.4 billion annually will see the airlines share passengers and costs on flights between the European Union, Switzerland, Norway, Canada, Mexico and the United States.

Management Contract
A management contract is an arrangement under which operational control of an enterprise is vested by contract in a separate enterprise which performs the necessary managerial functions in return for a fee. In 2001, Taj Group took on the management contract of Taj Palace Hotel, Dubai. In 2005, Taj Group obtains a management contract to operate "The Pierre" in New York, USA

Assembly
BMW is a worldwide manufacturer of high performance premium cars and motorcycles, and is known for classic BMW luxury cars and BMW motorsports cars. BMW started operating in India in the year 2006. In a bid to avoid higher tax scenario, BMW recently announced that they would be now assembling their 5 and 3 Series sedan engines and their X1 SUV engine at their Chennai plant. About 50% of BMW engines are assembled in India.(May 2011)

Licensing
An international licensing agreement allows foreign firms, either exclusively or non-exclusively to manufacture a proprietor s product for a fixed term in a specific market. US drug maker Gilead Sciences Inc. has agreed on new licensing terms with Ranbaxy Laboratories Ltd, India s biggest pharmaceutical firm by sales, and three other companies to produce generic versions of three HIV/AIDS drugs that are in late-stage clinical development, as part of an effort to provide faster access to its treatments to patients in developing countries.

Dr. Reddy's is presently licensed by Merck & Co. to sell an authorized generic version of the popular drug simvastatin (Zocor) in the USA.