sbm - emba - l1 intro

8/8/2019 Sbm - Emba - l1 Intro

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SSD ± SBM - 1. 1

Business PolicyBusiness Policy

&&

Strategic Management



SSD ± SBM - 1. 2

Excz 1 : Dimensions of a BusinessExcz 1 : Dimensions of a Business

What really is a ³Business´?

What does it constitute of ?



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What really is a ³Business´?What really is a ³Business´?

Is it Production? .. TML

Is it Advertising & Marketing? .. Lintas

Is it Distribution? .. DHL

Is it raising & managing money? .. HDFC

Is it a set of skilled people? .. Infosys



SSD ± SBM - 1. 4

Essence of a BusinessEssence of a Business

At it¶s very core , a Business is a set of Processes which earn a profit

by identifying & retaining customers through

satisfaction of their needs on an ongoing basis



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Main Elements of a BusinessMain Elements of a Business

A Profit oriented entity doing :

Procurement of RM n components / Skill sets ( Operations )

Conversion into Goods or Services ( Production )

Getting Goods to reach consumers ( Distribution)

Satisfying market needs on an ongoing basis ( Innovation )

(Thru Managing people , processes , finances , systems ,technology , etc )



SSD ± SBM - 1. 6

Excz 2 : Dimensions of a BusinessExcz 2 : Dimensions of a Business

What really is the key element of a

³Successful Business´? (say eg for being the market ± leader)

What is that ONE Thing that a Market Leader

must do most of the time?



SSD ± SBM - 1. 7

Key Element of a Successful BizKey Element of a Successful Biz

To be successful & to remain a leader ,

a Business must win against the competition

most of the time by acquiring & retainingcustomers through superior product or service

experiences & management skills , on an

ongoing basis.

Therefore , it needs to practice high quality..



SSD ± SBM - 1. 8

Global Equivalents for SBMGlobal Equivalents for SBM

Corporate StrategyStrategic Management

Business Policy

Organizational Policy



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SBM / BPSM :Broad Learning ObjectivesSBM / BPSM :Broad Learning Objectives

Understanding What Corporate Strategy is

Significance of Strategic Decisions

Analysis & Planning involved in Strategy

Formulation & Implementation of Strategy

Frameworks & Models used in SBM / BPSM

Role of Managers in SBM / BPSM process



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Strategic Business ManagementStrategic Business Management

Before we get into that ,

an understanding of the

Principles

& Practices of Corporate Businesses ,Is relevant for us«.



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Common Forms of BusinessesCommon Forms of Businesses

S ole Proprietorship

Partnership Fir m

Pvt Ltd Co / Public Ltd Co



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Corporate StructuresCorporate Structures

Classical : 7 Layered (a.k.a Pyramid Type)

New Age : 4 Layered (a.k.a Flat Type)



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Managing a CorporationManaging a Corporation

Biggest challenge is how to µManage Change¶

Managing Business is = Managing Market Dynamics

Constant flux in the market thru several influencers Situation compounded by Organizational Change

Organizational Change is driven by complex factors

Both external + internal change needs Managing

Possible thru Strategic Planning & thru

µ Management of Change¶

Both require strong orientation towards S B M



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Excz 3 :Excz 3 : Sectoral Spread of BusinessesSectoral Spread of Businesses

What are the main sectors of any Economy?

What businesses can exist in each ?



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Business & Economy «.Business & Economy «.

All Economies have 3 sectors :

Primary (Agriculture)

Secondary (Manufacturing) Tertiary (Services)

Economic Activity (production) is desirable in ALL

3 Sectors.. Together , they µproduce¶ economic

value for the Country => measured as µG D P¶



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Business Firms & SectorsBusiness Firms & Sectors

Agriculture :

Using Natural resources to µproduce¶

Land or Water Based Resources

Includes Aquaculture , Floriculture, Horticulture ,etc

eg ITC Agro / Century Flowers / Kerala Fisheries



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Manufacturing :

Conversion of sets of inputs to useful output

High emphasis on technology , machinery , etc

eg TML , RIL , HUL , etc

A Firm can choose to manufacture :A] Consumer Products ± Colas / Shoes / Cell phones

B] Industrial Products ± Boilers / Engines / Chillers



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Services :

Generation of economic activity thru offering

human skills / knowledge / mental ability ,etc

People Powered

eg Infosys / EXL / Apollo Healthcare , etc



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Major Industrial SectorsMajor Industrial Sectors

Heavy Industries : Steel / Alum / Cement Medium Industries : Imaging / PCs / Pharma

Light Industries : Dairy / Leather Shoes

Small Scale : Bread / Footwear / Crackers



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Major Service SectorsMajor Service Sectors

Financial Services ± Banking / Insurance / Advisory

eg HDFC / ICICI / Morgan Stanley

Transportation ± Land / Rail / Water / Air

eg Jet / Konkan Rail / G E Shipping

Logistics ± Land / Sea / Air / Hybrid

eg Fed EX / Ned Loyd

Telecom ± Fixed Line / Mobile

eg Airtel / RIM / BSNL

Media ± T V / Radio / Print

eg NDTV / Radio Mirchi / Eenadu



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Defining Corporate StrategyDefining Corporate Strategy

Strategy is the moulding of direction and

scope of an organization over the long ter m,

designed in such a way so as to deliver competitive

advantage to the said organization, by utilizing

resources & skillsets dynamically in a changing

environment and thereby , meet market needs &fulfill stakeholder expectations.



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Common Examples of StrategyCommon Examples of Strategy

Marketing Strategy

Funding Strategy

Recruitment Strategy

Positioning Strategy

Advertising Strategy

Recovery Strategy

5 Bowler Strategy

Net Rushing Strategy

2 Pit-Stop Strategy

Incitement Strategy

Lightweight Strategy

Military Strategy



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Is all that really Strategy?Is all that really Strategy?

S trategy v/s Tactics

Developing all-rounders => Strategy

Sending Irfan Pathan at # 3 is Tactics

Beefing up Infantry on the Desert Borders But

Attacking via Water Borders => Strategy

Deploying Submarines / Frigates is Tactics

Mittal Steel (before Arcelor) acquiring a string of ailing steel plants => Strategy

Systematically cutting costs (there)requires Tactics



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Imp Dimensions of StrategyImp Dimensions of Strategy

Mostly about the Long-Term actions

Molded by Overall purpose & Mission of the Orgnzn

Should lead to Competitive Advantage

Should help win market battles against competition

Must be backed by Resources & Skill-Sets

Operations (Tactics) must align with Strategy

Must adapt to Environmental Influences Must help to deliver on various expectations



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Quick Quiz on StrategyQuick Quiz on Strategy

What is an µaccretive acquisition¶?

Extra earnings that result from an acquisition of a

more profitable business [than the acquirer¶s] and

thus, add to the profitability rate of the acquiring co

Opposite: Dilutive Acquisition:

What is µblue sky thinking¶?

New [or different] & sometimes radical ways

of looking at & solving business problems.



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3 Levels of Strategy3 Levels of Strategy

L1 : Corporate Strategy :

Overall purpose & scope / Orgnzn¶s Mission

eg Which Businesses / Diversification / Acquisitions

Financing & Structural Shape of Business

Resource allocation to various divisions

Key Foundation of every other strategy

eg RIL¶s decision to enter the Telecom Business (RIM)



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L2 : Business Unit Strategy:

Concept of SBUs

(Distinct Market for it¶s Goods / Services) Competing in a particular , identified market

Focus is on Differentiation / Competing & Winning

Customer / Market Focused Strategy

Potential clash with Corp Strategy eg in Retailing

Eg RIM¶s decision to apply for only 13 Licences initially



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L3 : Operational Strategy :

Putting together Strategic Architecture

Comprising of resources, processes, skills, etc.

Facilitating, Practicing & Delivering on L1 & L2

Seamless Integration of all levels is important

eg RIM¶s high impact promotion µMonsoon Hungama¶

sbm - emba - l1 intro

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