STRATEGIC MANAGEMENT

Pavan Gadade

Sachin Chavan

STRATEGIC MANAGEMENT

Enviourment:- Surrounding factors that affect the business

4 C:-

1. Company Internal Factor

2. Customer

3. Competition External Factor

4. Condition

STRATEGY

Strategy :- Taking action in order to achieve desired outcome

Types of Strategy

Corporate Strategy Function Strategy Higher Level Management

Business Strategy

Middle Level Management

Middle Level Management

SWOT ANALYSIS

Strength

1) Best Design & Engineering Capability

2) Eco System

Weakness

1)Higher Cost as compared to competitor

2) High lead time

Opportunity

1) Enter into different market segment

2) Demand for smart phone and tablet is

growing

Threat

1) Samsung competition in

technology2) Chinese intervention

MICHAEL PORTER’S FIVE FORCES MODEL

MICHAEL PORTER’S FIVE FORCES MODEL

Example:- Cement Industry

BPOS (Bargaining power of supplier):- High

Scarcity of raw material (Mineral)

Most of mines are own or govern by government body

Many customer and few supplier

BPOB :- HIGH

High number of cement company

TONE :- LOW

Require own plant Own distribution network

High technology

Government licenses

High capital requirement

TOS :- LOW

Nothing can replace cement for construction purpose

IOC/CR :- LOW

There are many players in market but few player dominate the market Market share of cement company

L & T :- 22 %

ACC :- 15 %

Ambuja :- 13 %

JP :- 10 %

India Cement:- 10%

SUSTAINABLE COMPETITIVE ADVANTAGE

SUSTAINABLE COMPETITIVE ADVANTAGE

AMUL

VALUABLE × √ √ √

INIMITABLE × × √ √

RARE × × √ √

UNSUBSTITUTABLE

× × × √

Below average returns

Average returns

Above average returns

Above - Above average returns

VIRU

Example: Apple

VALUABLE INIMITABLE

Product Design Product interface

Heritage of technology

Innovation

RARE UNSUBSTITUTABLE

Convergence ( 4 segment got unstable)

Linkage to customer

Trust

INTEGRATION

Integration

Vertical Horizont

al

ForwardBackwar

d

INTEGRATION

Forward Integration : From Firm to Source

Example:- Videocon

Backward Integration : From Firm to Customer

Example:-Reliance Fresh, Vedanta Group

Horizontal Integration:- a strategy where a company acquires another company in the same Production Line.

Example:- Ultratech acquired JP Cement plant

MERGER & ACQUISITION

Merger :- A merger is a integration of two companies relatively on co-equal basis to form a new company

Company A +Company B= Company c

Acquisition: It is strategy when firm buys controlling or 100 % interest

in another firm to make acquired firm a subsidiary business with its portfolio

Company A +Company B= Company A

WHY MERGER FAILS

Diversification away from firm’s core business Inadequate analysis

Ethical Concern

Large Extra ordinary Debt

DIVERSIFICATION

When firm decides to operate business in several Industries

Related Diversification

Unrelated Diversification

RELATED DIVERSIFICATION

M & M

Farm Constructi

on Equipment

Steel processing

Mahindra systech

(component)

Mahindra Automotiv

e

UNRELATED DIVERSIFICATION

Leisure & Hospitality• Club

Mahindra

IT• Tech

Mahindra• Mahindra

Satyam

Retail • Mom & Me

BCG MATRIX

Brand L/F Market Growth Relative Market Share

Swift L 13 4X

Swift Dzire L 12 4X

Alto 800 L 4 4X

Wagon R L 3 3X

Omni L 2 2X

Ritz F 10 0.8X

Ertiga F 6 0.9XSX 4 F 2 0.6X

Kizashi F -3 0.1X

Grand Vitara F -4 0.1X

Objective :-  To help SBU’s with analyzing their business units or product lines & recommend strategies with the help of four quadrants by plotting products against Relative market share & Market growth

Mar

ket G

row

th

Relative Market Share

15

5

-5 5x 1x 0.1x

SwiftSwift Dzire

Alto 800 Wagon R

Omni

Ritz

Ertiga

SX4

Kizashi Grand Vitara

Boston Consulting Group Model

GE MCKINSEY MATRIX

SBU Size Growth Market share

Growth

Beverage and alcohol

XXL XXL

Aviation XXL M

UB Engineering XXL S

Chemical & fertilizers (MCF)

XL S

Industry Attractiveness Business Unit Strength

Assess the strength of a SBU Analyze current portfolio and resource allocation Focuses on Profitability, Market Attractiveness and Business Strength.

GE MCKINSEY MATRIX

Beverage &

alcohol

Aviation

Engineering

Chemical & Fertilizer

VALUE CHAIN ANALYSIS

Food SegmentDetails ITC HUL Nestle

Inbound Logistics 9 8 7

Operations 9 9 7

Outbound Logistics

9 8 8

Sales & Marketing 9 8 10

Service - - -

Total 36 34 32

“Value chain analysis (VCA) is a process where a firm identifies its primary and support activities that add value to its final product and then analyse these activities to reduce costs or increase differentiation.”

WEBLIOGRAPHY

http://www.theautomotiveindia.com/forums/indian-auto-news/12327-march-2013-sales-figures-cars-india.htm

http://autobei.com/blog/indian-passenger-vehicle-sales-analysis-april-2013/

http://en.wikipedia.org/wiki/Mahindra_%26_Mahindra_Limitedhttp://www.oncars.in/compare-cars/hyundai-i10-asta-1-2-at-kappa2-

with-sunroof-Vs-maruti-suzuki-omni-e-mpi-std-bs-ivhttp://www.mahindra.com/What-We-Do/Automotivehttp://economictimes.indiatimes.com/news/news-by-industry/auto/

automobileshttp://en.wikipedia.org/wiki/United_Breweries_Grouphttp://en.wikipedia.org/wiki/Mahindra_Group http://www.mahindra.com/#

thank you