NAME – ROHINI LOKHANDE

ROLL NO. – 70
SUBJECT – STRATEGIC MANAGEMENT

#ASSIGNMENT NO. 02
1. What are Critical Success Factors (CSFs)? What can be the CSFs for a
multi-brand retail company like ‘Pantaloons’?

 Critical success factors (CSFs) are the elements that help companies reach their
mission and goals. They allow a brand's team to identify the areas they should
focus on and track the progress.

Critical success factors are vital elements of a company that enable business
owners to achieve the goals they set for the future. If project managers list the
right factors that influence the achievement of the long-term and short-term
goals, they can succeed faster. These factors are more general than KPIs. For
example, “increase revenue.”

Critical success factor (CSF) is a management term for an element that is

necessary for an organization or project to achieve its mission. To achieve their
goals they need to be aware of each key success factor (KSF) and the variations
between the keys and the different roles key result area (KRA).

 Better team culture.

 Increased number of industry contacts. Customer relationship.

 Marketing.

 Low cost of production.

 Larger budget for marketing.

 High-quality product.

 Increased speed of delivery.

 Better research quality.

 Manufacturing.

A CSF is a critical factor or activity required for ensuring the success of a

company or an organization. The term was initially used in the world of data
analysis and business analysis. For example, a CSF for a successful Information
Technology project is user involvement.
 Critical success factors should not be confused with success criteria. The latter
are outcomes of a project or achievements of an organization necessary to
consider the project a success or the organization successful. Success criteria are
defined with the objectives and may be quantified by key performance
indicators (KPIs).

There are many tools to help to implement the keys Success Factor like
Business Model Canvas that will help to achieve a model or just a goal.

Critical success factors allow your team to focus solely on specific goals. They
align and engage your team on what your organization needs to get done to
meet your mission.

 Critical Success Factors of Pantaloon Retail:

 From external point of view, organized retail sector has been growing at a high
pace which is currently at 3% and would grow up to 20% in next three years.

 PRIL has diversified business strategy with multiple retail formats catering to a
wide cross-section of the Indian society having great depth and width.

 Had a most expensive spread in terms of presence across the different formats
and/or channels.

 The disposable income of main target customers of PRIL is increasing at a fast

pace.

 Pantaloon operates both in value retailing industry and lifestyle retailing

industry by focusing its resources and energies in expanding its chain of retail
stores.

 It has strengths like strong distribution network, B2B model similar to that of
Wal-Mart's.

 As Indian customers are price sensitive, PRIN starts providing goods at low
price by reducing their cost in efficient utilization of supply chain management
and reducing number of distributers.

 ➤ Pantaloon is integrated backwards in the apparel business, with its group

company, Pantaloon Industries which enables it to have some control over the
cost and quality of its apparel.

2. Glueck had designed a family tree of strategic alternatives at the corporate

level, also called as GRAND Strategies. Expansion strategy is one such
within ‘Grand Strategies’. Among others, Concentration and Integration
strategies are types of expansion strategies. Explain them in detail.
Elucidate with examples.
 Strategic alternatives evolve and revolve around the question of whether a
company must continue or change the business which it is currently doing or
improve the efficiency and effectiveness with which the firm achieves its
corporate objectives in its chosen business sector

According to GLUECK, there are four grand strategic alternatives which are
stability, expansion, retrenchment and any combination of these three. These
strategic alternatives are termed as grand strategies or basic strategies or generic
strategies.

 GRAND STRATEGIES OF GLUECK

1. Stability strategy

It involves incremental improvement in functional performance in terms of

customer groups in order to remain successful in business.

E.g. A photocopier machine company provides better after sales service to its
existing customer groups to improve its company and product image and
increase sales of accessories and consumables.

2. Expansion strategy

When a company substantially broadens the scope of its customer groups in

order to improve its performance either singly or jointly with another firm. E.g.
A printing firm changes from the traditional letter press printing to desktop
publishing in order to increase its production and efficiency.

3. Retrenchment strategy

When a company substantially reduces the scope of its customer groups in order
to improve its performance either singly or jointly.

E.g. A corporate hospital decides to focus only on specialty treatment and

realize higher revenues by reducing its commitment to general cases which are
typically less profitable to deal with.

4. Combination strategy
When a company adopts a mixture of stability, expansion and retrenchment
either at the same time in its different business or at different times in the same
business with the aim of improving its performance.

E.g. a paint company continues to offer decorative paints to provide a wider

variety to its customers (stability) and expands its product range to include
industrial and automotive paints (expansion) simultaneously it decides to close
down the division which undertakes large scale painting jobs (retrenchment).

EXPANSION STRATEGY

Definition:

The Expansion Strategy is adopted by an organization when it attempts to

achieve high growth as compared to its past achievements. In other words, when
a firm aims to grow considerably by broadening the scope of one of its business
operations from the perspective of customer groups, customer functions, and
technology alternatives, either individually or jointly, then it follows the
Expansion Strategy.

The reasons for the expansion could be survival, higher profits, increased
prestige, economies of scale, larger market share, social benefits, etc. The
expansion strategy is adopted by those firms that have managers with a high
degree of achievement and recognition. They aim to grow, irrespective of the
risk, and the hurdles coming in the way.

The firm can follow either of the five expansion strategies to accomplish its
objectives:

1. Expansion through Concentration

2. Expansion through Diversification

3. Expansion through Integration

4. Expansion through Cooperation

5. Expansion through Internationalization

1. Expansion through Concentration-

The Expansion through Concentration is the first level form of the Expansion
Grand strategy that involves the investment of resources in the product line,
catering to the needs of the identified market with the help of proven and tested
technology.

Simply, the strategy followed when an organization coincides its resources into
one or more of its businesses in the context of customer needs, functions, and
technology alternatives, either individually or collectively, is called expansion
through concentration.

2. Expansion through Diversification –

Expansion through Diversification is followed when an organization aims at

changing the business definition, i.e. either developing a new product or
expanding into a new market, either individually or jointly. A firm adopts the
expansion through diversification strategy, to prepare itself to overcome the
economic downturns.

Generally, the diversification is made to set off the losses of one business with
the profits of the other; that may have got affected due to the adverse market
conditions.

3. Expansion through Integration –

 Expansion through Integration means combining one or more present operations
of the business with no change in the customer groups. This combination can be
done through a value chain.

The value chain comprises of interlinked activities performed by an

organization right from the procurement of raw materials to the marketing of
finished goods. Thus, a firm may move up or down the value chain to focus
more comprehensively on the needs of the existing customers.

4. Expansion through Cooperation-

The Expansion through Cooperation is a strategy followed when an

organization enters into a mutual agreement with the competitor to carry out the
business operations and compete with one another at the same time, to expand
the market potential.

The expansion through cooperation can be done by following any of the

strategies as explained below:

1. Merger: The merger is the combination of two or more firms wherein one
acquires the assets and liabilities of the other in the exchange of cash or shares,
or both the organizations get dissolved, and a new organization came into the
existence. The firm that acquires another is said to have made an acquisition,
whereas, for the other firm that gets acquired, it is a merger.

2. Takeover: Takeover strategy is the other method of expansion through

cooperation. In this, one firm acquires the other in such a way, that it becomes
responsible for all the acquired firm’s operations. The takeovers can either be
friendly or hostile. In the former, both the companies agree for a takeover and
feel it is beneficial for both. However, in the case of a hostile takeover, a firm
tries to take on the operations of the other firm forcefully either known or
unknown to the target firm.
 3. Joint Venture: Under the joint venture, both the firms agree to combine and
carry out the business operations jointly. The joint venture is generally done, to
capitalize on the strengths of both the firms. The joint ventures are usually
temporary; that lasts till the particular task is accomplished.

4. Strategic Alliance: Under this strategy of expansion through cooperation, the

firms unite or combine to perform a set of business operations, but function
independently and pursue the individualized goals. Generally, the strategic
alliance is formed to capitalize on the expertise in technology or manpower of
either of the firm.

5. Expansion through Internationalization –

The Expansion through Internationalization is the strategy followed by an

organization when it aims to expand beyond the national market. The need for
the Expansion through Internationalization arises when an organization has
explored all the potential to expand domestically and look for the expansion
opportunities beyond the national boundaries.

However, going global is not an easy task, the organization has to comply with
the stringent benchmarks of price, quality, and timely delivery of goods and
services, that may vary from country to country.

3. Mintzberg’s 5 Ps model focuses on the approaches to strategy

implementation. Elaborate on these approaches.


What are the Mintzberg 5 P's of strategy?

The Mintzerg 5 P's of strategy is five alternative definitions of, or methods

of formulating, strategy. In 1987, Mintzberg published his first article on the 5
P's of Strategy. Each of the five P's represents a distinct approach to strategy.
This includes Plan, Ploy, Pattern, Position and Perspective. These five elements
enable a company to develop a more successful strategy. A strategy is long-term
and encompasses several aspects of the company or organisation you work with.

The strategy considers the organisation's values and other opportunities while
developing tactics to deal with competitors. As a comprehensive approach to
strategy, the five P's attempt to balance both the strengths of the company and
the other market forces it competes against.
Explaining the 5 P's of strategy

Mintzberg initially mentioned the notion in 1987. Each of the 5 P's indicates a
distinct strategic approach. You design a good business plan that takes full use
of the company's strengths and skills by knowing each P. Here are each of the 5
P's explained in more detail:

1. Plan

2. Ploy

3. Pattern

4. Position

5. Perspective

1. Plan

The benefits of making an effective plan are myriad. Planning comes with only
a small amount of expense attached to it, whereas later steps in strategy can be
more expensive. The more planning a company does, the more likely they're to
be able to achieve their goals and minimise risk. SWOT Analysis, PEST
Analysis and realistic business planning are all tools that assist you in
 developing a successful plan. Effective plans help managers to provide clarity to
their teams and set actionable steps towards each goal.

2. Ploy

Getting ahead of competitors by trying to disrupt, deter, dissuade or otherwise

influence them, according to Mintzberg, is part of a larger strategy. He refers to
this as a ploy. An example of this could be a grocery chain that has the option to
threaten to expand a shop to prevent a competitor from doing so or a telecoms
corporation that might acquire patents that a rival uses to establish a competing
product. Tools and technologies like the Futures Wheel and Scenario Analysis
help you investigate future situations where competition might arise.

3. Pattern

A strategy is occasionally derived from historical organisational behaviour. A

coherent and successful style of doing business might turn into a strategy
instead of being a conscious choice. Take notice of the patterns you find in the
team and organisation to apply this part of the five P's. Then consider if these
patterns have become an unspoken element of the company's strategy and what
influence they have on how to handle future strategic planning. This is also
known as an emergent strategy.

4. Position

The importance of position in establishing organisational strategy must be

carefully considered, created, planned and implemented, as it determines the
organisation's entire position in the market after taking into account all internal
and external elements. It focuses on how the company wants to portray itself in
the marketplace and in the minds of customers to attain a competitive
advantage.

To determine the position of a company in regards to strategy, you may want to

consider what the brand's basic values are, the nature and qualities of the
products and services it offers and its overarching brand strength. Exploring
these variables in depth makes it easier to establish the business in a niche and
to attract customers that desire its unique services.

5. Perspective
 The aspect of perspective doesn't relate to any of the above approaches. Instead,
it utilises a wider scope while maintaining the business at the centre. The
organisation creates the strategy by considering the business's most vital and
significant factors, such as how the intended audience perceives the company,
how the business's employees feel about the management as a whole and what
the views of the organisation's investors are. The sum of all of these distinct
viewpoints and their thought patterns serve as a useful source of information for
the organisation, assisting it in making strategic decisions.

Example of Mintzberg's 5 P's of strategy

Incorporating each of the five sections into the strategic planning can help you
create a solid, realistic and attainable business strategy. Below is an example of
the way a tech company could use Mintzberg's 5 P's of strategy:

1. Plan:

The tech company plans and develops consumer products that are both
functional and simple to use. They also design and implement numerous
software updates to broaden their ecosystem.

2. Ploy:

The business is well-known for producing original, one-of-a-kind and

extravagant items, giving them a competitive advantage in the market. They
threaten to sue any competitors who replicate their software or product features.

3. Pattern:

The company takes earlier inventions that have been highly successful in the
past and refines them. The power of their brand hooks consumers into
purchasing these products and quickly establishes them as a market leader.

4. Position:

The company builds a place for itself in the market and creates a reputation with
consumers as a specialised and premium brand. Its adherence to high standards
of quality means it's known for producing high-end goods that are tough to
compete with in terms of both software and hardware capabilities.

5. Perspective:
 The company's key principles include innovation and the ability to think
creatively, which act as the foundation for the company's culture and its unique
selling point.

Advantages of Mintzberg's 5 P's of strategy

There are countless benefits of Mintzberg's 5 P's of strategy. Not only is it a

straightforward procedure to follow, but it also offers a diverse set of viewpoints
to evaluate the plan and it encourages optimal practices in strategy development.
Here are some of the largest benefits of implementing the 5 P's of strategy into a
business plan:

 It offers versatility in approach to planning.

 It provides a clear outline of how businesses progress.

 Many modern business figures engage with it.