CONSOLIDATE, PRIORITIZE AND IMPLEMENT THE STRATEGIES. 22 NOV 2017

BISMILLAHIRAHMANIRAHIM....... 22 NOV 2017 Created by fatihah

4 Task Consolidation Strategies to Help Entrepreneurs

Prioritize everything. It’s a simple first step, but it’s an important one. Whenever a new task comes into play, prioritize it immediately — is it something that needs to be done today? This week? This month? Don’t waste time trying to make everything high priority.

2. Divide your time into communicative and non-communicative. Emails and phone calls distract all of us, but they are necessary to keep the business momentum going. To handle these necessary distractions, divide your time into “communicative” (when you’ll respond to emails and return phone calls) and “non-communicative” (when you’ll shut off your phone and focus on work).

3. Create a task list for items of concern. Making a task list exclusively of items that concern or worry you establishes a mentality that everything that isn’t on that list is not worth worrying about. Then, you’ll be able to focus on handling the most concerning items without getting bogged down with peripheral tasks.

4. Focus on a different segment of your business each day. If you consolidate your tasks into segment-specific days, you’ll be able to stream fluidly from one task to another. For example, Monday could be a day for development-related tasks, while Wednesday could be focused on new sales.

GENERATING ALTERNATIVE STRATEGIES USING PORTFOLIO MODELS 15 NOV 2017

BISMILLAHIRAHMANIRAHIM.....  15 NOV 2017 Created by fatihah

Shell directional policy matrix (Portfolio analysis) only enter those segments where the company has the
opportunity to succeed

Strategic Emphasis
The traditional way of looking at the business units’ strengths and weaknesses as well as comparing
business sector prospects was to use historical and forecast rates of return on capital employed. This was done because a sector where prospects were favorable and the company’s position strong tended to show
higher profitability. Shell found that these records and forecasts were not sufficient for the guidance of
management in the corporate planning and allocation of resources.

Reasons for this being:
1. Records and forecasts do not provide a systematic explanation why one business sector has more
favourable prospects than another or why the company’s position in a particular sector is strong or weak.
2. Records and forecasts do not provide enough insight into the underlying dynamics and balance of the
individual business sectors or the balance between the sectors.
3. Using the forecast and record method, when new products are being considered, actual experience cannot
be consulted.
4. Worldwide inflation has severely weakened validity and credibility of financial forecasts especially in the
case of businesses that are affected by oil process.
The basic method of the directional policy matrix is to identify and place on the horizontal and vertical
axes

• The main criteria by which prospects for a business may be judged to be favourable or unfavorable (favorable meaning a high profit and growth potential)
• The main criteria by which a company’s position in a sector may be judged to be strong or weak

HORIZONTAL AXIS

Horizontal labels for the quadrants are the reverse of those on the GE matrix. The extreme left quadrant is
labelled unattractive while the corresponding quadrant on the GE matrix is labelled High
The horizontal axis is labelled ‘Business Sector Prospects’ while the vertical axis is named ‘Company’s
Competitive Capabilities/Position’

VERTICAL AXIS

Note that the y-axis labels are the reverse of those in the GE McKinsey matrix and the lowest quadrant is labelled Strong versus the

GE matrix Low. The Shell directional policy matrix can be used to analyse different business sectors in an industry as well as competitors within a business sector

BOSTON  CONSULTING GROUP MODEL

Stars (high share and high growth)

Star products all have rapid growth and dominant market share. This means that star products can be seen as market leading products. These products will need a lot of investment to retain their position, to support further growth as well as to maintain its lead over competing products. This being said, star products will also be generating a lot of income due to the strength they have in the market. The main problem for product portfolio managers it to judge whether the market is going to continue to grow or whether it will go down. Star product can become Cash Cows as the market growth starts to decline if they keep their high market share.

Cash Cows (high share, low growth)

Cash cows don’t need the same level of support as before. This is due to less competitive pressures with a low growth market and they usually enjoy a dominant position that has been generated from economies of scale. Cash cows are still generating a significant level of income but is not costing the organisation much to maintain. These products can be “milked” to fund Star products.

Dogs (low share, low growth)

Product classified as dogs always have a weak market share in a low growth market. These products are very likely making a loss or a very low profit at best. These products can be a big drain on management time and resources. The question for managers are whether the investment currently being spent on keeping these products alive, could be spent on making something that would be more profitable. The answer to this question is usually yes.

Problem Child (low share, high growth)

Also sometime referred to as Question Marks, these products prove to be tricky ones for product managers. These products are in a high growth market but does not seem to have a high share of the market. The could be reason for this such as a very new product to the market. If this is not the case, then some questions need to be asked. What is the organisation doing wrong? What is competitors doing right? It could be that these products just need more investment behind them to become Stars.

A completed matrix can be used to assess the strenght of your organisation and its product portfolio. Organisations would ideally like to have a good mix of cash cows and stars. There are four assumptions that underpin the Boston Consulting Group Matrix:

• If you want to gain market share you will need to invest in a competitive package, especially through investment in marketing
• Market share gains have the potential to generate a cash surplus due to the effect of economies of scale.
• The maturity stage of the product life cycle is where any cash surplus is most likely to be generated
• The best opportunities to build a strong market position usually occur during a market’s growth period.

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GENERATING ALTERNATIVE STRATEGIES USING RECENT MODELS 8 NOV 2017

BISMILLAHRAHMANIRAHIM...... 8 NOV 2017 Created by fatihah

EXAMPLE OF STRATEGIC ALTERNATIVE

Business environments are highly uncertain and executives need to be innovative and flexible to survive. They achieve this through strategic alternatives that enable their companies to maintain a competitive edge over rivals. For instance, executives can adapt through safer small investments or risky and costly changes, according to the "Harvard Business Review." Some alternative strategies include price focus, differentiation, diversification and adjacent businesses.

PRICE FOCUS
Price focus is a market niche strategy where a company competes on cost. This strategy targets a small buyer segment and the company needs to have a low-cost structure compared to rivals. This strategy is effective when a business is new, it cannot pursue a bigger market, customer segments are different, or when no other competitor is focusing on the targeted segment.

DIFFERENTIATED

In cases where competition is stiff because of the proliferation of similar products, a company can come up with features that differentiate their products or services from those of rivals. The differentiating features need to be valuable to customers so that they are ready to pay premiums for them, and difficult for rivals to copy. When introducing new features, executives need to ensure that the product is affordable and that it complements customers needs.


DIVERSIFICATION
Diversification is a type of growth strategy where a company develops new products for existing or new markets. This strategy is especially effective where a company can no longer gain competitive advantage through product differentiation. Other than gaining competitive advantage, diversification can help a company to better use its resources, increase sales and minimize the risk associated with market upheavals that affect a particular product.


ADJACENT
The adjacent businesses strategy involves entry into a niche where a core business is operating at its full or near-full potential and generating surplus cash. The business focuses on current customer preferences to seek growth opportunities. When making an adjacency move, a company can introduce new products or develop new distribution channels. To make a successful adjacency move, a company needs to have discipline and conduct in-depth analysis on customer preferences and economic capabilities.

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generating alternative strategies using strategic management model 1 NOV 2017

BISMILAHHIRAHMANIRAHIM.......  1 NOV 2017 Created by fatihah....



Strategic Management & Strategic Planning Process

DEFINITION

Strategic management process

is a method by which managers conceive of and implement a strategy that can lead to a sustainable competitive advantage.

Strategic planning process

 

is a systematic or emerged way of performing strategic planning in the organization through initial assessment, thorough analysis, strategy formulation, its implementation and evaluation.

The process of strategic management lists what steps the managers should take to create a complete strategy and how to implement that strategy successfully in the company. It might comprise from 7 to nearly 30 steps, and tends to be more formal in well-established organizations.

The ways that strategies are created and realized differ. Thus, there are many different models of the process. The models vary between companies depending upon:

• Organization’s culture.
• Leadership style.
• The experience the firm has in creating successful strategies.

now we talk about VALUE CHAIN.

The idea of the value chain is based on the process view of organisations, the idea of seeing a manufacturing (or service) organisation as a system, made up of subsystems each with inputs, transformation processes and outputs. Inputs, transformation processes, and outputs involve the acquisition and consumption of resources - money, labour, materials, equipment, buildings, land, administration and management. How value chain activities are carried out determines costs and affects profits.

Most organisations engage in hundreds, even thousands, of activities in the process of converting inputs to outputs. These activities can be classified generally as either primary or support activities that all businesses must undertake in some form.

According to Porter (1985), the primary activities are:

• Inbound Logistics - involve relationships with suppliers and include all the activities required to receive, store, and disseminate inputs.
• Operations - are all the activities required to transform inputs into outputs (products and services).
• Outbound Logistics - include all the activities required to collect, store, and distribute the output.
• Marketing and Sales - activities inform buyers about products and services, induce buyers to purchase them, and facilitate their purchase.
• Service - includes all the activities required to keep the product or service working effectively for the buyer after it is sold and delivered.

Secondary activities are:

1. Procurement - is the acquisition of inputs, or resources, for the firm.
2. Human Resource management - consists of all activities involved in recruiting, hiring, training, developing, compensating and (if necessary) dismissing or laying off personnel.
3. Technological Development - pertains to the equipment, hardware, software, procedures and technical knowledge brought to bear in the firm's transformation of inputs into outputs.
4. Infrastructure - serves the company's needs and ties its various parts together, it consists of functions or departments such as accounting, legal, finance, planning, public affairs, government relations, quality assurance and general management.

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TYPOLOGY OF ALTERNATIVE STRATEGIES 2 : THE BUSINESS AND FUNCTIONAL LEVEL 25 OCT 2017

 BISMILLAHIRAHMANIRAHIM..... 25 OCT 2017  Created by fatihah...

Marketing Functional Strategy

In companies that are marketing oriented, the marketing strategy on a functional level influences the other functions and their strategies. A typical marketing strategy is to determine customer needs in an area where the company has a natural competitive advantage. Such advantages might be in location, facilities, reputation or staffing. Once the marketing strategy has identified the kind of product customers want, it passes the information to operations to design and produce such a product at the required cost. The advertising department must develop a promotional strategy, sales must sell the product and customer service must support it. The marketing strategy forms the basis for the strategies of these other departments.

Other Functional Strategies

The non-marketing functional strategies must support the marketing strategy that, in turn, is a component of the overall business strategy. In a single-business company, those strategies are tightly focused on one industry, but they must also deliver data that allows the corporate strategy to examine possible diversification. Single-business companies are usually either highly ranked in their single business or dominant in their niche. The strategies at the functional level try to maintain such a position but also look for external danger signs. If events outside the company's control lead to a deterioration of its position, strategic components from a functional level must signal to the corporate level that an implementation of alternative strategies is required.

Types of Strategic Alternatives

Most businesses today also develop strategies at two distinct levels. The two general levels are;

Business-level strategy

Business-level strategy is the set of strategic alternatives from which an organization chooses as it conducts business in a particular industry or market.

Such alternatives help the organization to focus its efforts for each industry or market in a targeted fashion.

Corporate-level strategy

Corporate-level strategy is the set of strategic alternatives from which an organization chooses as it manages its operations simultaneously across several industries and several markets.

Companies today compete in a variety of industries and markets.

So; as they develop business-level strategies for each industry or market, they also develop an overall strategy that helps define the mix of industries and markets that are of interest to the firm.

Features of Strategic plans

The following are some of the most important characteristics of strategic plans:

1. They are long-term in nature and place an organization within its external environment.
2. They are comprehensive and cover wide range of organization activities.
3. They integrate guide and control organizational activities for the immediate and long-range future.
4. They set the boundaries for managerial decision making. Since strategic plans are the primary documents of an organization all managerial decisions are required to be consistent with its goals. Strategic plans, thus, set forth the long-term objectives, intermediate objectives and main purpose or basic role of an organization.

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TYPOLOGY OF ALTERNATIVE STRATEGIES 1 : THE CORPORATE LEVEL 18 OCT 2017

BISMILLAHIRAHMANIRAHIM...... 18 OCT 2017 created by fatihah

Corporate level strategy is concerned with the strategic decisions a business makes that affect the entire organization. Financial performance, mergers and acquisitions, human resource management and the allocation of resources are considered part of corporate level strategy. There are three types of corporate level strategy that a business can employ.

Value-Creating Strategy

A value-creating strategy is one in which the business seeks to edge out its competitors by gaining more market share. These strategies seek to add real and perceived value to the business' products and services by exploiting economies of scope -- the resources and capabilities of the business that can be shared across the entire organization to reduce costs and increase efficiency. A key idea behind value-creating strategy is diversification: offering more products to more consumers within the market in an attempt to dominate all of part of the overall market share.

Value-Neutral Strategy

A business can employ a value-neutral strategy when the organization isn't so much concerned with allocating resources and manpower as it is with securing its current place within the market. In essence, value-neutral strategy helps shore up the business' operations plan. Initiating regulatory oversight, creating synergy between departments, working to reduce risk and securing a steady cash flow are value-neutral approaches.

Value-Reducing Strategy

Businesses also sometimes engage in value-reducing strategies. This happens on an organization-wide level when the stakeholders or customers perceive that the business is getting too big for its britches or that only the top-level executives are benefiting from diversification. In this case, value-reducing strategy refocuses the business' market, helps it define a target demographic and puts mechanisms in place to prevent unnecessary or harmful growth.

Deciding on a Strategy

While it sometimes is evident which type of corporate level strategy an organization should adopt, it is less clear at other times, particularly when the market is unsteady or the business cannot afford to waste resources trying new products and services that may not be profitable. Asking yourself a few strategy-level questions can help in the decision: Does my company feel threatened by competitors? If so, value-creating strategy is the right direction. Does my business need to tighten its resources and monitor its finances more closely? Focus on value-neutral strategy. Are just a select few people benefiting from the organization's success? Consider value-reducing strategy.

Business-Level Strategies

1. Cost Leadership – Organizations compete for a wide customer based on price. Price is based on internal efficiency in order to have a margin that will sustain above average returns and cost to the customer so that customers will purchase your product/service. Works well when product/service is standardized, can have generic goods that are acceptable to many customers, and can offer the lowest price. Continuous efforts to lower costs relative to competitors is necessary in order to successfully be a cost leader. This can include:

• Building state of art efficient facilities (may make it costly for competition to imitate)
• Maintain tight control over production and overhead costs
• Minimize cost of sales, R&D, and service.

Porter's 5 Forces Model 

Earlier we discussed Porter's Model. A cost leadership strategy may help to remain profitable even with: rivalry, new entrants, suppliers' power, substitute products, and buyers' power.

• Rivalry – Competitors are likely to avoid a price war, since the low cost firm will continue to earn profits after competitors compete away their profits (Airlines).
• Customers – Powerful customers that force firms to produce goods/service at lower profits may exit the market rather than earn below average profits leaving the low cost organization in a monopoly positions. Buyers then loose much of their buying power.
• Suppliers – Cost leaders are able to absorb greater price increases before it must raise price to customers.
• Entrants – Low cost leaders create barriers to market entry through its continuous focus on efficiency and reducing costs.
• Substitutes – Low cost leaders are more likely to lower costs to entice customers to stay with their product, invest to develop substitutes, purchase patents

18 OCT 2017 created by fatihah.

STRATEGIC PLANNING PROCESS : THE INTERNAL ENVIRONMENTAL ANALYSIS 11 OCT 2017

BISMILLAHIRAHMANIRAHIM.....  11 OCT 2017 CREATED BY FATIHAH...

Strategic Plan Objectives

Strategic plan objectives can be either internally or externally focused. Internal strategic objectives look within a company to increase its productivity, efficiency, quality standards and overall operational effectiveness. An example of an internally focused objective could be to reduce the costs associated with production mistakes or to increase employee satisfaction and loyalty. Externally focused strategic goals center on a company's performance in the marketplace. Examples of external objectives include goals for market share growth, market leadership and innovation in product development.

Internal Strengths and Weaknesses

A comprehensive strategic plan includes a situational analysis that considers internal strengths and weaknesses. Analyzing a company's current strengths and weaknesses provides a wealth of insight helpful in accomplishing internal goals and internal analyses can provide advantages for achieving external goals, as well. Analyze all components of your businesses when identifying internal strengths and weaknesses. Look into the education, experience and overall competence of your employees to discover competitive advantages in your workforce. Review your production systems to spot any competitive advantages or clear impediments. Review your cost structure, pricing policies and financial ratios to determine you financial strength or weakness compared with competitors.

Assessing the Internal Environment

As we have indicated, when an organization evaluates which factors are its strengths and weaknesses, it is assessing its internal environment. Once companies determine their strengths, they can use those strengths to capitalize on opportunities and develop their competitive advantage. For example, strengths for PepsiCo are what are called “mega” brands, or brands that individually generate over $1 billion in sales1. These brands are also designed to contribute to PepsiCo’s environmental and social responsibilities.

PepsiCo’s brand awareness, profitability, and strong presence in global markets are also strengths. Especially in foreign markets, the loyalty of a firm’s employees can be a major strength, which can provide it with a competitive advantage. Loyal and knowledgeable employees are easier to train and tend to develop better relationships with customers. This helps organizations pursue more opportunities.

Although the brand awareness for PepsiCo’s products is strong, smaller companies often struggle with weaknesses such as low brand awareness, low financial reserves, and poor locations. When organizations assess their internal environments, they must look at factors such as performance and costs as well as brand awareness and location. Managers need to examine both the past and current strategies of their firms and determine what strategies succeeded and which ones failed. This helps a company plan its future actions and improves the odds they will be successful. For example, a company might look at packaging that worked very well for a product and use the same type of packaging for new products. Firms may also look at customers’ reactions to changes in products, including packaging, to see what works and doesn’t work. When PepsiCo changed the packaging of major brands in 2008, customers had mixed responses. Tropicana switched from the familiar orange with the straw in it to a new package and customers did not like it. As a result, Tropicana changed back to their familiar orange with a straw after spending $35 million for the new package design

11 OCT 2017 CREATED BY FATIHAH...

STRATEGIC PLANNING : THE EXTERNAL ENVIRONMENTAL ANALYSIS 4 OKT 2017

BISMILLAHIRAHMANNIRAHIM..... 4 OKT 2017  CREATED BY : FATIHAH

External Opportunities and Threats

Situational analyses consider opportunities and threats from the external environment. External opportunities include things such as gaps in the market that no company is currently serving, new markets and other clear growth opportunities. External threats include new product releases from competitors and new competitors arising in the market. A range of external factors can present either opportunities or threats, depending on the specifics. Changes in the law, for example, can provide distinct opportunities to some businesses in an industry while threatening the survival of others. Changing consumer preferences and market-changing new product categories, as another example, can give new entrepreneurs a world of opportunities while seriously threatening established brands.

Strategic Decision-Making

In formulating strategic decisions, managers need to consider present and future environmental opportunities and threats. Entrepreneurs develop a basic business idea with a target customer base. Then they proceed to scan the environment for opportunities and threats and analyze the results in the light of company's resources and strengths. This analysis gives the managers the information to decide on the feasibility of the business idea. Oversight in identifying opportunities or threats can lead to misguided strategic decisions and business failure.

Task Environment

The task environment of a business includes the components of the environment that the company deals with directly, such as customers, suppliers and competitors. Customers are the central stakeholders in strategic decision-making. Any decision that sidelines the needs of the customers can potentially lead to loss of business. Suppliers provide inputs for the value-creation process of the company. Any lapse in the quality of their products and services can affect the operations of the company and eventually trickle down to the customer. As a result, the management works with suppliers to ensure they provide timely and quality service. Any strategic decision should consider the reaction of competitors. Strategic decisions may strengthen the position of the company in relation to competitors or may leave the company vulnerable to competitor attacks.

General Environment

The general environment comprises those components of the environment that impact the business indirectly, such as the government, socio-cultural, technological and economic conditions. For example, the company should comply with taxation, labor market and industry-related regulation. Additionally, technological advances pose new opportunities as well as threats. For example, new online music sharing formats threaten to alter the entire recording industry, and the advent of the Internet made e-commerce a reality.

Sources of Innovation

The environment holds potential sources of innovation for an entrepreneurial venture. An unexpected success or outside event can indicate a business opportunity. For example, Don Cullen of Transmet Corporation spilled fine aluminum flakes onto the company's parking lot and later observed that the asphalt did not turn sticky in high temperatures. This discovery led to the idea of producing aluminum chips for roofing. Sales doubled every year since the commercialization of the product.

3 OKT 2017  CREATED BY : FATIHAH.

ELEMENTS OF STRATEGIC MANAGEMENT 27/9/2017

BISMILLAHIRAHIM....  27/9/2017  CREATED BY : FATIHAH

Strategic management includes goal-setting, planning and evaluation steps. After company leaders establish objectives for the organization, the four strategic management elements used to achieve it include environmental scanning, strategy formulation, strategy implementation, and evaluation and control. These elements helps develop effective business tactics and evaluate performance relative to goals.

ENVIRONMENT ANALYSIS

Environmental analysis involves comparing the company's situation to opportunities and threats in the external environment. Factors such as the economy, regulations, competition, societal changes, customer preference changes, technological advances and the environmental all could impact the environmental scan. A strengths, weaknesses, opportunities and threats analysis is a standard tool used in this stage. Conducting a SWOT assessment gives leaders a good picture of current internal strengths and weaknesses relative to external business opportunities and potential threats.

STRATEGY FORMULATION

In formulating a strategy, leaders want to leverage core strengths and protect against threats to areas of vulnerability. If a business has advanced technology or services, an improving economy presents an opportunity to effectively communicate the importance of value to a discerning target market. In contrast, if economic conditions soften, company leaders must decide whether to continue to promote in the same way or offer discounts to budget-conscious buyers. Retraining service employees to better connect with value-oriented consumers is another approach to building strong, loyal customer relationships.

STRATEGY IMPLEMENTATION

The implementation element of strategic management involves taking action. Company leaders communicate the strategy to internal leaders who then pass on roles and responsibilities to their team members. Each department and employee may have a modified role in implementing a new strategy, which may require leveraging outside resources. A customer service manager may hire an external service training organization, for example, to implement a strategy to improve service performance in order to strengthen customer relationships.

EVALUATION AND CONTROL

Successful leaders don't just expect, they inspect. This point contributes to the purpose of the fourth element -- evaluation and control. As departments and workers carry out their responsibilities toward goals, supervisors assess performance. A key component of evaluation is quantified goals. The service department could have a 95 percent customer satisfaction objective, for instance. Over time, managers evaluate their workers and attempt to correct deficiencies.

26/9/2017  CREATED BY : FATIHAH

INTRODUCTION TO STRATEGIC MANAGEMENT 20 SEPT 2017

BISMILLAHIRAHMANIRAHIM....... 20 SEPT 2017 CREATED BY : FATIHAH

Strategic Management - An Introduction

Strategic Management is all about identification and description of the strategies that managers can carry so as to achieve better performance and a competitive advantage for their organization. An organization is said to have competitive advantage if its profitability is higher than the average profitability for all companies in its industry.

Strategic management can also be defined as a bundle of decisions and acts which a manager undertakes and which decides the result of the firm’s performance. The manager must have a thorough knowledge and analysis of the general and competitive organizational environment so as to take right decisions. They should conduct a SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats), i.e., they should make best possible utilization of strengths, minimize the organizational weaknesses, make use of arising opportunities from the business environment and shouldn’t ignore the threats.

Strategic management is nothing but planning for both predictable as well as unfeasible contingencies. It is applicable to both small as well as large organizations as even the smallest organization face competition and, by formulating and implementing appropriate strategies, they can attain sustainable competitive advantage.

It is a way in which strategists set the objectives and proceed about attaining them. It deals with making and implementing decisions about future direction of an organization. It helps us to identify the direction in which an organization is moving.

Strategic management is a continuous process that evaluates and controls the business and the industries in which an organization is involved; evaluates its competitors and sets goals and strategies to meet all existing and potential competitors; and then reevaluates strategies on a regular basis to determine how it has been implemented and whether it was successful or does it needs replacement.

Keeping an Eye on Expenses and Goals

A balanced record of plans and policies in relation with operational moves are used to evaluate the business's overall performance. Starting from the executive level, the basic starting point is stakeholder interest, needs and expectations (i.e., financiers, customers, owners, etc.)

The following image is an example of a strategy map applicable to a public-sector organization. It shows how various goals are linked with one another and provides the trajectories to achieve these goals.

19 SEPT 2017 CREATED BY : FATIHAH