SM Notes for IPCC

SHORTEST TRICK FOR GETTING GOOD MARKS IN IT-SM

Summary Notes CA-IPCC

Please read your book first and after go through

these notes, it is writing in a summarizing manner,

when you read this at the time of revision, this will

help you. Best of luck for your exams. Yogesh Gupta

By:

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H T T P : / / Y O G E S H G U P T A R O H T A K . B L O G S P O T . C O M

With Blessings of:

Dedicate to:

My family, My Teachers & my friends

Yogesh Gupta (Author)

While every effort has been taken avoid errors, the author and other his teachers,

knowledge partners, mentors, Gurus are not responsible for the consequences of

any action taken on the basis of this notes/book, because Im also a student. Any

suggestion, improvement, complaint are requested from you.

Mail me: [email protected]

ALL THE BEST

HAPPY READING

YOGESH GUPTA yogeshguptarohtak.blogspot.com

Fb.com/CAYogeshGuptaa

Mail me your review at: [email protected]

YOGESH GUPTA

Student CA-Final, CS-Executive Bachelor in Buss. Admn.

Visit me at: yogeshguptarohtak.blogspot.com Write me at: [email protected]

Prepared by: Yogesh Gupta -Page No: 1- http://facebook.com/mr.yogeshgupta For more notes: [email protected] visit me at: http:// yogeshguptarohtak.blogspot.com

CHAPTER-1 (Business Environment)

ELEMENT OF BUSINESS ENVIRONMENT PORTERS MODEL OF COMPETITION

MICRO MACRO a. Threatness of new entrance, b. Threatness of new substitute,

c. Bargaining power of Buyers, d. bargaining power of Suppliers, Rivalry among

current players

a. Customer b. Suppliers c. Organizational employees d. Competitors e. Market f. Intermediaries

1. Government 2. Economic conditions 3. Legal setup 4. Political setups 5. Technological changes 6. Social 7. Culture 8. Global

CHAPTER-2 (Business Policy & SM) STRATEGY VISION MISSION

An analysis of situation & then planning and implementation of activities to achieve desired goals or objectives.

Road map to future, indicate the kind of company management, also specify the company intentions and capabilities. Include Mission Statement; define who we are and where are we now? (DEFINE PRESENTLY)

Element of company vision and future position & growth ambition, provide foundation to the future aim of Organization. (WHERE COMPANY WANT TO BE IN FUTURE)

OBJECTIVE OF BUSINESS [PGSES]

RELATIONSHIP BETWEEN ORGANISATION & ENVIRONMENT

COOPERATION IN COMPETITIVE ENVIRONMENT

a. Profitability, b. Growth, c. Stability,

d. Efficiency, e. Survival

a. Exchange of Information b. Exchange of resources c. Exchange of Power & influence

a. Cartelization, b. Kieretsu, c. Internal cooperation/Family owned

competition

PROCESS & FRAMEWORK OF SM STRATEGIC LEVELS IN ORGANIZATION

GENERAL STRATEGIC ALTERNATIVES

a. Forming vision & setting objectives b. Development strategy to achieve

vision & objectives. c. Implement & execution of strategy d. Feedback/making adjustments

overtime.

a. Corporate level b. Business level c. Function level

a. Stability b. Expansion c. Retrenchment d. Combination

GSA DECISION MAKING

1. Top mgmt involvement 2. Allocation of large resources 3. Impact on long run 4. Future oriented 5. Multifunctional 6. Internal & External

SUPER NOTES FOR IPCC


CHAPTER-3 (Strategic Analysis)

STRATEGIC ANALYSIS ISSUES SHOULD BE CONSIDERS

STRATEGIC ANALYSIS

After formulating vision, mission & objectives of the org., it is necessary to dissect the external and internal environment of the org. to formulate a long term strategy to achieve these mission & objectives. This is not only a talking event of managers, where managers can get some creative & innovative thinking & opinions only, but also takes decisions about the pursuing of strategy in external & internal environment. Two most important analysis of external & internal environment are:

Industry and competitive analysis Analysis of org. SWOT, capabilities, internal resources.

Timeline (Result of small decisions) Balance (between internal potentials&

opportunities) Risk (which is included in business i.e.

Short term or long term and Internal or external)

SITUATION ANALYSIS ANALYSIS OF EXTERNAL & INTERNAL ENVIRONMENT

MEANING ELEMENTS IN SA Situation analysis tries to identify the risk & access their consequences.

Product Analysis

Competition Analysis

Distribution Analysis

Environment Analysis

Opportunities & Issues

SWOT ANANLYSIS INDUSTRY AND COMPETITIVE ANALYSIS FACTORS:

Strength-Inherent Capabilities Weakness-Inherent weakness Opportunities-favorable situation Threats- unfavorable situation

Significant of SWOT Analysis: Logical framework Relationship/comparative

analysis Strategy Identification.

Dominant economic feature of industry.

Nature & strength of competition Trigger of change Identifying strongest & weakest

positioned cos Likely strategic moves of rivals. Key factors for competitive success. Financial attractiveness of industry

TOWS Matrix PORTFOLIO ANALYSIS

Developed by: Heinz Weihrich Its a comparison of SW of an

org. with T.O. of org.

External

Opportunities (O)

External Threats

(T)

Internal Strength

(S) SO

Maxi-maxi strategy

ST Maxi- Mini strategy

Internal

Weakness (W) WO

Mini-maxi strategy

WT Mini- Mini strategy

TOWS Matrix

Meaning: Manage set of product, business units & companies. Concepts:

a. Strategic Business Unit- (SBU is a unit of the company that has a separate mission & objectives, which can be planned independently from other cos business)

b. Experience cycle- (EC also known learning curve is based on the commonly observed phenomenon that avg. cost per unit decrease at the cumulative production)

c. Product life cycle-(every product passes through a life cycle from Introduction to Decline stage. PLZ is an S shaped curve.)These are: i) Introduction ii) Growth iii) Maturity iv) Decline

SUPER SUMMARY NOTES

Prepared by: Yogesh Gupta -Page No: 3- http://facebook.com/mr.yogeshgupta For more notes: [email protected] visit me at: http://bit.ly/yogeshgupta

PORTFOLIO ANALYSIS MODEL Boston Growth Share Matrix- BCG Matrix

Ansoffs Product market Growth Matrix

ADL Matrix GE/McKinsey Model

Display the various business units on a graph of the market growth rate vs. market share

relative to competitors.

Relative Market Share

---> (cash generation)

High Low

High Star Question

mark

Low Cash Cows

Dogs

(^cash usage)

Existing Product

New Product

Existing market

Market

Penetration

Product

Development

New market

Market Development

Diversification

Attempt to growth matrix suggest a

businesss attempts to grow depend on whether it market new or existing with as

well new or existing product.

Developed by Arthur D. Little. ADL analyzes portfolio on two dimensions first on industry

measurement is an identification of PLC of industry.

Industry VS FIRM

FIRM INDUSTRY

Introduction Dominant

Growth Strong

Maturity Favorable

Decline Tenable

Weak

High Medium Low

Hig

h

Invest Invest Protect

Mediu

m

Invest Protect Harves

t

Low

Protect Harvest Divest

Market

Growth



CHAPTER-4 (Testing-General & Automated control)

Grand Strategy

Stability Expansion

Intensification

Market Penetration

Market Development

Product Development

Diversification

Verticle Integration

Forward Backward

Concentric Diversification

Conglomerate Diversification

Retrenchment Combination

CORPORATE STRATEGY (CS)

STAGES OF CORPORATE STRATEGY

FORMULATION-IMPLEMENTATION

PROCESS

STRATEGIC ALTERNATIVES REASON FOR ADOPTING

GRAND STRATEGY

Every company/

corporate form a strategy known as CS.

It is a consist of competitive moves and

approaches to achieve successful performance of co. (Choice of business, market,

product) Mix of pro-active

and re-active strategy.

1. Developing strategic

vision. 2. Setting objective: Used

balance card approach. 3. Crafting & Designing a

strategy: Firstly check SW of org, secondly

competitors, thirdly determine the customer

needs. 4. Strategy

Implementation & Execution: Its like a management process.

5. Monitoring Evaluation review.

A. Cost Leadership- Produce at low cost for consumers, who is

price sensitive. Implement

then, when consumers do not

care brand to brand or large

number of buyers with

bargaining power. B. Differentiation- Provide

unique and different goods

from competitors. Charge from

customers for differentiation

and gain customers loyalty. C. Focus- Focus on the special

group of customers or

geographical market or

product line segment.

1) Stability-Less Risky, people feel comfortable, environment faced

is relatively stable & expansion

may be being threatening. 2) Expansion- when environment

demands increasing in pace of

activity, psychology & strategist

feels that in expansion is more

growth, control over the market. 3) Retrenchment-Environment

threatening, management has no

longer wishes to remain in

business, either partly or wholly due to continuous losses.

SUPER SUMMARY NOTES


CHAPTER-5 (Formulation Of Functional Strategy)

KEY FUNCTION STRATEGY

MARKETING FINANCE PRODUCTION LOGISTIC R&D HUMAN RESOURCES

This function satisfies the need of org. for which org. is formed i.e. serving customer. Mktg. always looks for long term profits and growth rather than immediate profit. Key Marketing Strategic Elements: Expanded

Marketing Mix-Addition to traditional 4Ps new are: people, physical evidence, process

Marketing Analysis-Identify environment O&T, analyze co. SW to determine the best opportunities.

Market Planning- involve deciding

that will help the co. attains its strategic obj.

Dealing with marketing environment-must carefully analysis

for avoiding the threats and gain opportunities.

Acquiring capital or source of funds, projected financial statement and Budget, mgmt & uses of funds, evaluate worth of business. Three approaches for Evaluation of Net Worth of Business: Determine Net

worth/ Stockholder equity, after that, add/less the value of goodwill and overvalued &

undervalued of assets.

Future Benefits, (Rule of Thumb)-5to 10 times of firms current year profits.

Based on 3 methods-

1. Base selling price of similar co. per unit of its capacity. 2. price earning ratio method:

X 5

3. Outstanding Share method:

No of share O/S X

MP per share +

Premium.

Production system concerned with capacity, location, design, and sequence of working. Production What to produce? How to produce? For whom to produce?

Production Strategy related to operation planning and controls are concerned with aggregate production planning, material supply, inventory, cost & quality management and maintenance of plant & equipment.

Flow of goods & material from source to destination i.e. suppliers to customer. Right materials are available at right place at a right time at right quality at right cost to the customers. Logistic Strategy helps in saving the cost. Effective logistic strategy can help business in: Cost saving Reduced

inventory holding time

Improve delivery time

Customer satisfaction

Competitive advantage

Developing new products

Improve old products

Designing technology

Proper technique to use Raw Material.

Three approaches to applying R&D strategy:

First firm to market new technology products

Innovative imitator of successful products.

Low cost produced by mass producing products.

Biggest challenge is to control Human alteration. The approx quarter of the profit consume for employee satisfaction and assurance or motivating them. HR Strategy cant be executed if there:

Social & analytical problems,

Attitude problem, Non-supportive

approach of top mgmt.

Following points are to be considered :

Selection & recruitment,

training, appraisal of

performance, compensation

Strategic role of HR Manager: Providing purposed directions, creating competitive atmosphere, facilitation of change, diversification of workforce, building core competency, development of work culture & ethics.



CHAPTER-6 (Strategic Implementation & Control)

INTER RELATIONSHIP BETWEEN STRATEGY FORMULATION &

IMPLEMENTATION

PRINCIPAL COMBINATION OF EFFICIENCY AND EFFECTIVENESS

FORWARD & BACKWARD

LINKAGE

FO

RM

ULA

TIO

N

Sound A B Flawed C D

Weak Excellent

IMPLEMENTATION

A: lack of experience, lack of leadership B: Best C: Business Model redesigning and implement readjustment D: have to do redesign their strategy before readjusting their implementation skills.

OP

ER

AT

ION

MA

NA

GE

ME

NT

Efficient 1 2

Inefficient 3 4

Effective Ineffective

STRATEGIC MANAGEMENT

A: Thrives and succeed B: Die Slowly C: Survive D: Die Quickly.

Strategy formulation changes in the org. for implementation in form of:

org. structure style of leadership flexibility to adapt new tech. etc.

STRATEGIC BUSINESS UNIT ( SBU) THE VALUE CHAIN ANALYSIS (VCA)

Grouping of businesses which are related. Purpose is to provide effective strategic planning treatment to each one of its

product/services. Concept is relevant to multi-product, multi-business enterprises.

Characteristics: Single business or collection of related business which offer scope for independent

planning & which might feasibility stand alone from the rest of org. He has own set of competition. Has a manager who is responsible for strategic planning & profit performance. Resource allocation

The company can gain competitive advantages not just beating its competitors, but discovering what the customers want and exceeding customer expectations. This is done by VCA.

Orgnaisational Structure

Functional Structure

CEO

General Manger -Accounts

General Manger-

Marketing

General Manger- HR

Multi divisonal

CEO

Division-1

Manager

Manager

Division-2

SBU

President

Corporate R&D

Corporate HR

SBU 1

D1

D2

SBU 2 SBU 3

SUPER SUMMARY NOTES


CHAPTER-7 (Reaching Strategic Edge)

BUSINESS PROCESSING REENGINEERING (BPR)

BENCHMARKING TOTAL QUALITY

MANAGEMENT (TQM) SIX SIGMA

BPR is redesigning of business process to achieve dramatic changes in the processes, in term of cost, time, performance quality and responsiveness to customers. Principle of BPR:

Single point responsibility

If work is paralleled then, there should be perfect co-ordination & common database.

Need of BPR: Because of

Outdated process Time & cost Need of IT Sub System view

Process/Steps in BPR:

1. Determine Obj. 2. Identifying customers

need 3. Study the existing

process 4. Formulate & redesign

of process 5. Implement to

redesigned process.

Benchmarking is an approach of setting goal & measuring productivity based on the best industry practice. Its provides standards against which performance can be measured. Process/Steps:

1. Planning 2. Data compilation 3. Analysis 4. Comparison 5. Reporting

6. Review

Include three terms: Total, Quality & Management TQM is mgmt approach for the org., centered on quality, based on the participation of all its members and aiming at long-term success through customer-satisfaction, and benefits to all members of org. and to society.

Principle in TQM:

1. Commitment 2. Culture 3. Continuous

Improvement 4. Co-Operation 5. Customer-focus 6. Control 7. Cross-functional 8. Cause analysis 9. Change 10. Concept of team.

Six Sigma provides the highest standard for the quality control of products and processes. Six sigma is a thorough and disciplined methodology that uses data & statistical analysis to measure & improve a companys products quality by identifying & eliminating DEFECTS in mfg. & service related process. Commonly defined six sigma standard 3.4 defects per million parts or 99.99966% of products manufactured are defect free. SS efforts target 3 main areas:

1. Improve Customer satisfaction 2. Reducing process cycle time 3. Reducing defects.

Two methodology of Six sigma:

1. DMAIC (for existing products) Define, Measure, Analyze, Improve, Control

2. DMADV (for new products) Define, Measure, Analyze, Design, Verify.

About the Author: Hey friends, myself Yogesh Gupta, pursuing Chartered Accountancy

and company secretary Course. Im not so much minded as some other people; I just share my notes which help me in cracking my exams. I passed senior

secondary in 2008 in first division, after I passed Graduation Degree in

Business Administration (BBA) in June 2011.

There are some difficulties in my life thats why I CA after

senior secondary. But Jo bhi hota hai, ache ke liye hi hota hai, to mujhe is

baat ki koi tensions nahi hai. In December, 2010 in passed CA-CPT & CS-Foundation in first attempt, In November 2011; I gave both groups for CA-

IPCC, but only one group was cleared. So, I wrote papers in May 2012 for

Group-2, and cleared also second group. In December 2012, also clear the CS-

Executive in first sitting. Now, turn of crack inter stage of CShope for the best.

I also feel happy in preparing notes for my friends & studymates. Im

always working on my motto sirf apne liye hi to sab jeete hm different

so, kuch dusro ke liye b kru!

Im also a student, and Im always waiting for yours reviews. If you have any complaint or suggestion about it, so please feel free to write me.

[email protected] http://fb.com/mr.yogeshgupta

http://fb.com/CAYogeshGuptaa http://yogeshguptarohtak.blogspot.com

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