Strategy & Entrepreneurship (Core)

1. Strategy & Entrepreneurship (Core)

2. Module Content • This innovative module focuses on company and organisation strategic analysis and decision making in the context of changing industry structures, and the uncertain business environment in which organisations function. • The module examines theoretical and management issues underpinning a wide range of strategic and entrepreneurship debates relevant to modern organisations. • An evaluation of differing approaches to strategy-making is explored in order to provide an informed and critical view of creative strategies. • After introducing the strategy and entrepreneurship concepts, this module examines common analytical tools and frameworks used for the purpose of evaluating strategic context and future development opportunities.

3. Indicative Content • The scope and importance of strategic management models and the development of strategy in practice. • Analysing the business environment. PESTLE, Porter’s 5 forces, scenario planning and strategic groups. • Analysing the strategic capability of the organisation. Value chain, core competences and financial analysis. • The basis of strategic choice. Generic strategy at the business unit level. • Corporate level strategy. Portfolio analysis. • Directions of strategic development – market penetration, market development, product development, vertical integration and diversification. • Methods of strategic development – internal development, joint ventures, strategic alliances, mergers and takeovers. • Innovation and Entrepreneurship. • Implementation Issues in Strategy. • Understanding and developing Business Models. • Strategic evaluation and selection.

4. Strategic Management • Crucial Questions • What business are we in? • What products and services will we offer? • For whom we should produce the products are services? • At what prices and what terms we offer it? • Who are our competitors? • On what basis will we compete?

5. 1.Definition of Strategy • SM consists of the analysis, decisions and actions an organization undertakes in order to create and sustain competitive advantages. • This definition captures two main elements : 1.1. SM entails three ongoing processes ; Analysis, Decisions and Actions 1.2 . Creation of sustainable competitive advantage

6. 1.1. Analysis, Decisions & Actions • ANALYSIS • Strategic Goals along with analysis of internal and external environment • DECISIONS • Two Major Decisions: What industries should we compete in?. How should we compete in those industries? ( Domestic, international etc) • ACTIONS • Design the organization, allocate resources to bring the intended strategy to reality.

7. 1.2.Create Competitive Advantage • Why some firms outperform others? • This implies focusing on 2 fundamental questions: How should we compete in order to create competitive advantage in the market place? 2 Fundamental Questions How to make such advantage sustainable in the market place? (How can we make our CA unique, valuable and difficult for competitors to copy?)

8. Analyzing Goals & Objectives Analyzing External Environment Assessing the Internal Environment Assessing Firm’s Intellectual Assets 2. SM Process 1 STRATEGY ANALYSIS Formulating Business Level Strategy Formulating Corporate Level Strategy Formulating International Strategy Entrepreneurial Strategy & Competitive Dynamics 2 STRATEGY FORMULATION 3 STRATEGY IMPLEMENTATION Strategic Control & Corporate Governance Creating Effective Organizational Design Create a Learning & Ethical Organization Fostering Corporate Entrepreneurship 4 FEEDBACK AND CONTROL

9. Strategic Management Model Environmental Strategy Strategy Evaluation Scanning Formulation Implementation and Control Mission External Reason for Societal existence Objectives Environment General Forces What results to Strategies Task accomplish Environment by when Plan to Industry Analysis achieve the Alternatives mission & Internal objectives Programs Go through decision- making process and Determine alternative strategy To select Structure Process to monitor Chain of Command Activities performance needed to Budgets Culture and take accomplish corrective Beliefs, Expectations, a plan Cost of the action Values programs Procedures Resources Sequence Assets, Skills of steps Competencies, needed to Knowledge Performance do the job Feedback/Learning

10. 3.Four Key Attributes of SM • SM is directed towards overall organizational goals and objectives. • Includes multiple stakeholders in decision making • Needs to incorporate short-term and long-term perspectives • Recognition of trade-off between efficiency and effectiveness.

11. 3.1.Direct organization towards overall goals and objectives “Organization Vs Individual Rationality” ‘The strategic importance of managing myopia’ : Hrebiniak, L.G.& Joyce, W.F. Sloan Management Review (1986) What might look ‘rational’ or most appropriate for one functional area may not be in the best interest of the overall firm What is best for the total organization not a single functional area

12. 3.2. Multiple stakeholders in decision making Corporate Governance Relationship between various participants in determining the direction and performance of corporations Primary Participants Management (Headed by CEO) Shareholders (Owners) BOD (Elected by Shareholders Robert Monks & Neil Minow, 2001, Corporate Governance, 2nd Edition, Blackwell

13. 3.3. Short-term and Long-term Perspective Creative Tension Maintain both a vision for the future as well as focus on present operating needs (Peter Senge, MIT)

14. 3.4. Trade-off Between Effectiveness& Efficiency EFFECTIVENESS “Doing the Right Thing” EFFICIENCY “Doing Things Right” Some experts call it as “Ambidexterity” Thee challenge managers face of both aligning resources to take advantage of existing product markets as well as pro-actively exploring new opportunities

15. 4.Intended Strategy Vs Realized Strategy Deliberate Strategy Intended Strategic Realized Strategy “Of Strategies: Deliberate and Emergent,” Strategic Management Journal, Vol. 6, 1985 (Mintzberg, H & Waters, J.A.) Unrealized Strategy Emergent Strategy

16. 5.LEVELS OF STRATEGY • Corporate • Business • Functional

17. Corporate Strategy • Developed on the basis of organization wise policies • These are value oriented, conceptual and less concrete than decision at other two levels • Mostly it is futuristic, innovative and pervasive in nature • Eg: Acquisitions, Diversification, Structural Redesigning etc

18. Business Level Strategy • These strategies are formulated by each SBU to make best use of its resources based on the environment it faces. • At this level, strategy is a comprehensive plan providing objectives for SBUs, allocating resources among the functional areas and coordination between them for achievement of corporate level objectives • This operates within the overall organizational strategies • Business strategies relate with the ‘How’ and the corporate strategies relate with the ‘What’.

19. Functional Level Strategy • This strategy relates to a single functional operation and the activities involved therein. • This level is the operating end of the organization • The decisions at this level are described as tactical • The strategies are concerned with how different functions of the enterprise like marketing, finance, manufacturing etc contribute to the strategy of other levels

20. Operation Strategy • Sometimes a fourth level of strategy also exits. This level is known as the operating level. • It comes below the functional level strategy and involves actions relating to various sub-functions of the major function • Eg. Marketing research, sales promotion etc under Marketing Function.

21. Strategic Decisions at Different Levels

22. Importance of Strategy • Take decisions based on long range forecasts • To deal with new trend and competition effectively • Management becomes flexible to meet unanticipated changes • Increase in ROI • Clarity of direction by setting objectives • Ensure organizational effectiveness

23. Importance • Enhancement of managerial motivation • Managers become proactive by being conscious of the business environment • Provide opportunity for involvement of managers at different levels • Improve corporate communication, coordination and allocation of resources.