Building Your Company’s Vision

• Companies that enjoy enduring success have core values and a core
purpose that remain fixed while their business strategies and
practices endlessly adapt to a changing world.
• Truly great companies understand the difference between what
should never change and what should be open for change.
• The above rare ability is linked to the ability to develop a vision
• Vision provides guidance about what core to preserve and what
future to stimulate to progress towards
• “ What Do We Want To Become”
 Components of Vision
• Core Ideology ( Core Values + Core Purpose)
• Envisioned Future ( BHAGs + Vivid Description)12r
 Mission
• “ Where Are We going” – Reason for Being
• It’s a creed statement
• A declaration of Attitude
• Should be broad
• Should be reconciliatory
• Inspiring
• Less than 250 words in length
 Components of Mission Statement
• Customers
• Products or Services
• Markets
• Technology
• Concern for survival , growth and profitability
• Philosophy
• Self- Concept
• Concern for Public Image
• Concern for Employees
Vision
To be an educational institution of choice for its stakeholders and promote human wellbeing through continuous
learning
 Our mission articulates our commitment to provide learner-centric and high-impact educational practices that
help prepare the participants to be technically competent and ethically aware management professionals through
continuous improvement in teaching-learning process and research activities.
 Mission
 To impart learner-centric education that focuses on developing learners as competent, ethically aware, and
socially aware management professionals through continuous improvement in teaching-learning process and
research
Our stakeholders are served by providing general and specialized Postgraduate Diploma in Management (PGDM)
and Fellow Program in Management (FPM). A balance is maintained between teaching and research so that the
creation of both basic and applied knowledge along with teaching excellence is valued.
 
In carrying out this mission, we are guided by the following goals and expect the learners to exhibit the
competencies also given below:
CURIOUS CASE OF KINGFISHER
BYJU’s vs. Tuition Teachers
PESTL
 External Environment Scanning
• The job of the strategist is to understand and cope with competition.
• Managers often define competition too narrowly ( Indian Railways)
• Competition for profit goes beyond industry rivals.
• Customers, Suppliers, Potential Entrants and substitute products are
part of extended rivals in any industry.
• Can we match profitability of Hotels and Textile industry with that of
software and Artwork???
A TITANIC Called ‘ Kodak Eastman’
https://www.youtube.com/watch?v=ppjyB2MpxBU

https://www.youtube.com/watch?v=gCdXiOssbM0

https://www.youtube.com/watch?v=Q0ZEmLosVXE
 These are 5 Forces Not Factors
• Savvy customers can force down the price by playing you and your
rivals against each other. ( Where are Taxiwale uncles)
• Powerful suppliers may constrain your profits if they charge higher
price.
• Aspiring entrants , armed with new capacity and hungry for market
share , can ratchet up the investment required for you to stay in the
game.
• Substitute offerings can lure customers away.( metro vs. autorickshaw.
Phone vs. bank)
• Established rivals compete intensely on price.
 Threat of New Entry
• Pepsi with Aquafina
• Microsoft with Internet Browser
• Apple with I –pod
• Samsung in mobile
• Starbucks in America ( Low Entry Barriers)
 Threat of New Entry…
• Barriers to Entry
i. Supply- side economy of scales
ii. Demand- side benefit of scales
iii. Customer switching cost
iv. Capital Requirement
v. Unequal access of distribution channel ( P&G and Godrej had a
costly divorce…very very costly divorce)
vi. Restrictive government policies
 Rivalry Among Existing Competitors
• Competitors are numerous and roughly equal in size and power.
• Industry growth is slow ( Fight for market share)
• Rivals are highly committed ( Airtel and Vodafone)
• Firms cannot read each others signal well.
Rivalry is Destructive to Profitability and
Causes Price Competition
• Products and services of rivals are nearly identical and there are few
switching costs for buyer ( Colgate Maxfresh vs. Closeup)
• Fixed costs are high and marginal costs are low (Jio, RIL)
• Capacity must be increased in large increments to be efficient
( Cement, Steel , Insurance)
• The product is perishable ( Hotel)
 Power of Suppliers
• Microsoft and Intel.
• Supplier is not heavily dependent on the buyer
• Switching cost for buyer is high ( auto ancillary, Bloomberg terminals)
• Suppliers offer differentiated products ( Rolls Royce , Pharma)
• No substitute ( Pilot shortage)
• Supplier can enter industry ( Samsung, Mankind pharma, Acer PC)
 Idea in Practice ( 5 Forces)
• Position your company where the forces are weakest ( Porsche)
• Exploit changes in force ( I- tunes)
• Reshape forces in your favour (supplier power, customer power)
• Invest in differentiated products
• Offer better value through wider product accessibility ( Vending
machines in softdrink)
 Good Industry Analysis
• Good Industry analysis looks at the structural underpinning of
profitability in an appropriate time horizon.
• It is about understanding the root cause of profitability
• Good Industry analysis does not just list pluses and minuses , thereby
declaring an industry attractive or otherwise. It rather sees an
industry in overall , systemic terms.
Why is Porsche still around?
Value Discipline Triad (Treacy, Wiersema)
 Value appropriation—Industry Analysis: 5
Forces
• Who wants to appropriate value?
• Buyers => lower price
• Suppliers => increase cost
• Who else limits the amount you can appropriate?
• Current competitors => lower price
• New competitors => lower price
• Substitution => lower price
• Complementors => lower WTP, or higher cost
• What other factors determine profitability in your industry?
 Value Proposition
• Customers care about (WTP – Price), not just one or the other
• One can create value by increasing the customer’s willingness to pay
or by decreasing cost (iPod vs. Southwest)
• What factors drive willingness to pay?
• What factors drive cost?
 What is the size of your competitive
advantage?
• CA = (WTP – Cost)you – (WTP – Cost)strongest competitor
Or
• CA = (WTP – WTP competitor) + (Cost competitor – Cost you)
Outcomes of Four- Corner Exercise
• Is competitor satisfied with current position?
• What likely moves or strategy shifts will the competitor make?
• Where is the competitor vulnerable?
• What will provoke the greatest and most competitive retaliation by
the competitor?
 Strategic Groups – Plot Them
• Firms that pursue almost similar strategies with almost similar
resources.
• Yet companies vary in profitability.
• Plot them on two broad characteristics
• McDonald’s vs. Burger King vs Domino’s vs. Olive Garden ( Price and
Menu)
 Strategy Audit
• What’s the state of our industry right now?
• What are the condition in the industry that affect everyone right
now?
• How might that evolve in future?
• What are the WTP and cost drivers in for different segments in the
market?
• Where my competitors are moving?
• What all activities Am I engaged in ?
• How many of the activities are just best practices?
 Strategy – A Reminder
• Strategy is the creation of unique and differentiated position
involving different set of activities
• Strategy is a distinctive array of interdependent choices that address
certain questions.
• Strategy requires you to make trade-offs in competing – to choose
what not to do .
• Strategy involves creating “fit” among a company’s activities.
 A Resource Based Approach to
Organizational Analysis
• Resources are organization’s assets are thus building blocks of the
organization. They include both tangible and intangible.
• Capabilities refer to organization's ability to exploit the resources. It is
functionally based and resides in function.
• A competency is a cross-functional integration and coordination of
capabilities.
• A core competency is a collection of competencies that crosses
divisional boundaries.
 Evaluation of Firm’s Competencies ( VRIO)
• Value : Does it provide customer value and competitive advantage.
• Rareness : Do no other competitors possess it?
• Imitability : Is it costly for others to imitate it?
• Organisation: Is the firm organized to exploit the resources?
 Resource Based View Contd…
• The resource based view , recognizes that each company possesses a
unique collection of resources and capabilities; the implication is that
the key to profitability is not doing the same as other firms but rather
exploiting the difference.
• Primary goal of resource analysis is not to value assets but to
understand their potential for creating competitive advantage.
• This requires not just the balance sheet valuation but , information of
composition and characteristics of resources.
 Strategy – A Reminder
• Strategy is the creation of unique and differentiated position
involving different set of activities
• Strategy is a distinctive array of interdependent choices that address
certain questions.
• Strategy requires you to make trade-offs in competing – to choose
what not to do .
• Strategy involves creating “fit” among a company’s activities.
• Strategy is Long Term
 Strategy Audit
• What’s the state of our industry right now?
• What are the condition in the industry that affect everyone right
now?
• How might that evolve in future?
• What are the WTP and cost drivers in for different segments in the
market?
• Where my competitors are moving?
• What all activities Am I engaged in ?
• How many of the activities are just best practices?
 Strategy – A Reminder
• Strategy is the creation of unique and differentiated position
involving different set of activities
• Strategy is a distinctive array of interdependent choices that address
certain questions.
• Strategy requires you to make trade-offs in competing – to choose
what not to do .
• Strategy involves creating “fit” among a company’s activities.
 A Resource Based Approach to
Organizational Analysis
• Resources are organization’s assets are thus building blocks of the
organization. They include both tangible and intangible.
• Capabilities refer to organization's ability to exploit the resources. It is
functionally based and resides in function.
• A competency is a cross-functional integration and coordination of
capabilities.
• A core competency is a collection of competencies that crosses
divisional boundaries.
 Evaluation of Firm’s Competencies ( VRIO)
• Value : Does it provide customer value and competitive advantage.
• Rareness : Do no other competitors possess it?
• Imitability : Is it costly for others to imitate it?
• Organisation: Is the firm organized to exploit the resources?
 Resource Based View Contd…
• The resource based view , recognizes that each company possesses a
unique collection of resources and capabilities; the implication is that
the key to profitability is not doing the same as other firms but rather
exploiting the difference.
• Primary goal of resource analysis is not to value assets but to
understand their potential for creating competitive advantage.
• This requires not just the balance sheet valuation but , information of
composition and characteristics of resources.
 Strategy – A Reminder
• Strategy is the creation of unique and differentiated position
involving different set of activities
• Strategy is a distinctive array of interdependent choices that address
certain questions.
• Strategy requires you to make trade-offs in competing – to choose
what not to do .
• Strategy involves creating “fit” among a company’s activities.
• Strategy is Long Term
https://www.youtube.com/watch?v=AynPhvmtRK0

https://www.youtube.com/watch?v=bL5MRmVl69Q
https://www.youtube.com/watch?v=EvvnoNAUPS0
https://www.youtube.com/watch?v=tyUw0h5i9yI&t=1682s
 Corporate Strategy- 3 Issues
• The firm’s overall orientation towards growth, stability or
retrenchment ( Directional strategy)- Orientation towards growth/
stability
• The industries and markets in which firm competes through its
products and business units – ( Portfolio Analysis) coordination of
cash flow among business units.
• The manner in which management coordinates activities and
transfers resources and cultivate activities among product lines and
business units ( Parenting Strategy) building corporate synergies
through resource sharing and development
Inorganic Growth …..
Is AstraZeneca and SII JV or Strategic
Alliance
LIC and Paytm
Aditya Birla Group and Van Huesen
L&T constructing Manufacturing Unit for
Bombay Dyeing
Toll Roads ( NHAI and IRB Infrastructure)
What is Vertical Growth?
• Is a growth that is achieved by taking over a function previously
provided by either the supplier or distributor
• It can be achieved by both organic or inorganic growth.
• This may be done to reduce cost, gain control over scarce resources,
guarantee quality of a key input or obtain access to key customers.
• It can be done through backwards or forward integration
• Example Reliance, Nestle, Sun Pharma, Kellogg's
What is Horizontal Growth?
• A firm can achieve horizontal growth by expanding it’s operations
into/ through
• Other Geographic location
• Adding products/ product lines/ new brands
• Unilever, Maggi, Hidesign,Amul
International Entry Option for Horizontal
Growth
• Exporting
• Licensing
• Franchising
• JV
• Acquisitions
• Green – Field Development
• Turnkey Operations
• Build- Operate – Transfer (BOT)
Stability Strategy
• Pause/ Proceed with caution strategy ( Dell)
• No Change Strategy
• Profit Strategy ( Seductive but, could be dangerous if not well
managed) ( cost cutting, IPO cut expenses like ad. R&D ,defer
expenses and expansion, sell product line for cash flows)
Retrenchment Strategy
• Turnaround Strategy
I. Contraction ( Stop the bleeding, Indian Railways)
II. Consolidation
• Sell out/ Divestment ( Jaguar Land Rover)
• Captive Company Strategy
Portfolio Analysis
• BCG Matrix
• IE Matrix
• SPACE Matrix
Strategy Implementation
• A brilliant strategy may put you on competitive map… but,
• Only solid execution keeps you there.
• Most companies struggle with implementation
Two levers of Successful Strategy Execution
• Clarifying decision rights
• Ensuring Information flows
Elements of Strong Execution
• Everybody has a good idea of the decisions and actions for which he
or she is responsible.
• Important information about the competitive environment gets to
headquarter quickly
• Information flow freely across organizational boundaries
• Field and line employees usually have the information they need to
understand the bottom- line impact of their day –to-day choices.
Strategy Formulation & Implementation

Formulation Implementation
• Positioning force before action • Managing force
• Focuses on effectiveness • Focuses on efficiency
• Cognitive process • Operational process
• Require intuitive and analytical • Require motivation and
skills leadership skills
• Require coordination between • Require broad based
few people coordination and buy-in
 Corporate Strategy- 3 Issues
• The firm’s overall orientation towards growth, stability or
retrenchment ( Directional strategy)- Orientation towards growth/
stability
• The industries and markets in which firm competes through its
products and business units – ( Portfolio Analysis) coordination of
cash flow among business units.
• The manner in which management coordinates activities and
transfers resources and cultivate activities among product lines and
business units ( Parenting Strategy) building corporate synergies
through resource sharing and development