1. STRATEGIC MANAGEMENT AND BUSINESS POLICY
Strategic analysis and choice
(c) Dr. Azhar Kazmi 2008

2. Learning objectives Describe the process of strategic choice
Explore the tools and techniques for strategic analysis
Examine the subjective factors in strategic choice
Discuss the manner in which organisations handle unforeseen environmental events through formulation of contingency strategies
Itemise the contents of a typical strategic plan for an organisation
Discuss the strategic plan preparation and content for private and public sector organisations in India
(c) Dr. Azhar Kazmi 2008

3. CASE: Strategic Choices for Bajaj Allianz General Insurance
Insurance sector liberalize
2-Bajaj forms Strategic alliance with Allianz of Germany-74/26 % ( Areas of strengths ?)
3-12 Competitors: Govt-4, Private-8
4- Direct Competition: product offerings; market segment
5- Major competitors- ICICI Lombard, Reliance; New India assurance etc
6- Vision Statement- Be first Choice of customers
- Be a preferred employer;
-Be No 1 insurer creating value
(c) Dr. Azhar Kazmi 2008

4. CASE: Strategic Choices for Bajaj Allianz General Insurance
SWOT Analysis:
Strength: Strong Promoters
Weakness: All India presence, poaching of employees
Opportunities: Untapped market
Threat: Every one wants bigger share of market
What are strategic choices before BA ?
Which strategy they should adopt?
(c) Dr. Azhar Kazmi 2008

5. Scope of General Insurance business
General Insurance areas:
Health and Medicare
Motor Vehicles
Home
Travel
Employees
Factories
Offices
Other areas
(c) Dr. Azhar Kazmi 2008

6. Process of strategic choice
Focussing on strategic alternatives
Analysing the strategic alternatives
Evaluating the strategic alternatives
Choosing from among the strategic alternatives
(c) Dr. Azhar Kazmi 2008

7. Gap analysis for focussing on strategic alternatives
Time T2 T1
Performance gap
Desired performance
Present
performance
Performance
(c) Dr. Azhar Kazmi 2008

8. Generic business strategies
Cost leadership
Differentiation
Broad target
COMPETITIVE SCOPE
Focussed Cost leadership
Narrow target
Focussed differentiation
Low-cost products/services
Differentiated products/services
COMPETITIVE ADVANTAGE
(c) Dr. Azhar Kazmi 2008

9. Dynamic competitive positioning
(c) Dr. Azhar Kazmi 2008

10. Possible Business Definition of an Oral Care Company.
(c) Dr. Azhar Kazmi 2008

11. Strategic analysis Tools and techniques for strategic analysis
Corporate portfolio analysis
GE nine-cell matrix
Corporate parenting analysis
SWOT analysis
Experience curve analysis
Life cycle analysis
Industry analysis
Strategic groups analysis
Competitor analysis
(c) Dr. Azhar Kazmi 2008

12. General Electric nine-cell matrix
High
Medium
Low
Strong
Average
Weak
BUSINESS STRENGTH / COMPETITIVE POSITION
GREEN
YELLOW
RED
ZONE
STRATEGIC SIGNAL
INVEST /
EXPAND
SELECT /
EARN
HARVEST / DIVEST
INDUSTRY ATTRACTIVENESS
(c) Dr. Azhar Kazmi 2008

13. General Electric nine-cell matrix
Eight Factors for Industry competitiveness:
Market Size and growth rate
Industry profit margin
Competitive intensity
Seasonality
Cyclicality
Economies of scale
Technology and social environment
Legal and human right
(c) Dr. Azhar Kazmi 2008

14. General Electric nine-cell matrix
Factors for business strength Competitiveness:
Relative market share
Profit Margins
Ability to compete on price and quality
Knowledge of customer and market
Completive strength and weakness
Technological capability
Caliber of management
(c) Dr. Azhar Kazmi 2008

15. Consolidated SWOT profile
ETOP Sector impact SAP Impact factor
Economic ↑
Market → Finance ↓
International ↓ Marketing →
Political → Operations ↑
Regulatory → Personnel →
Social ↑ Information management ↑
Supplier → General management ↑
Technology ↑
Up arrows indicate favourable impact; down arrows indicate unfavourable impact, while horizontal arrows indicate a neutral impact.
(c) Dr. Azhar Kazmi 2008

16. Porter’s five forces model of competition in an industry
Potential threats from firms which make substitute products or services
Forces of competition created by rivalry
Buyers’ bargaining power
Potential threat from entry of new firms
Suppliers’ bargaining power
(c) Dr. Azhar Kazmi 2008

17. Components of competitor analysis
Future goals of competitor
Current strategy of competitor
Key assumptions made by competitor
Capabilities of competitor
(c) Dr. Azhar Kazmi 2008

18. Subjective factors in strategic choice
Considerations for governmental policies
Perception of critical success factors and distinctive competencies
Commitment to past strategic actions
Strategist's decision styles and attitude to risk
Internal political considerations
Timing and competitor considerations.
(c) Dr. Azhar Kazmi 2008

19. Contingency strategies
Contingency strategies are formulated in advance to deal with uncertainties that are a natural part of the business
The prospects of emergencies or disasters
The phenomenon of serendipity
A model of contingency planning consists of three steps:
Identifying the contingent events
Establishing the trigger points
Developing and strategies and tactics
(c) Dr. Azhar Kazmi 2008

20. Strategic plan
A strategic plan (also called corporate, group, or perspective plan):
It is a document which provides information regarding the different elements of strategic management and the manner in which an organisation and its strategists propose to put the strategies into action.
(c) Dr. Azhar Kazmi 2008

21. Contents of a comprehensive strategic plan ….
A clear statement of strategic intent covering the vision, mission, business definition, goals and objectives.
Results of environmental appraisal, major opportunities and threats, and critical success factors.
Results of organisational appraisal, major strengths and weaknesses, and core competencies.
Strategies chosen and the assumptions under which those strategies would be relevant.
Contingent strategies to be used under different conditions.
(c) Dr. Azhar Kazmi 2008

22. ….Contents of a comprehensive strategic plan
Strategic budget for the purpose of resource allocation for implementing strategies and the schedule for implementation.
Proposed organisational structure and the major organisational systems for strategy implementation including the top functionaries and their role and responsibility
Functional strategies and the mode of their implementation
Measures to be used to evaluate performance and assess the success of strategy implementation.
(c) Dr. Azhar Kazmi 2008

23. Strategic Plan preparation at Infosys Technologies
Exhibit 9.10 (Page 301)
Strategic Group every year July initiates 3-5 year plan strategic plan process
Makes environmental scanning, Competitive analysis and model building
Makes a formal presentation to Board of Directors followed by another one to top managers
(c) Dr. Azhar Kazmi 2008

24. Strategic Plan preparation at Infosys Technologies
(c) Dr. Azhar Kazmi 2008

25. Nest Session Activating Strategies Reading Chapter-10 Case Study:
MP Rural Development Project
(c) Dr. Azhar Kazmi 2008