Strategic Management

New Syllabus 2022

Most Important Questions

By

DEEPAK
CLASSES

June & dec 24

QUESTION WITH ANSWER
Module- 8 Introduction

Explain the meaning of Strategy and its characteristics?

1. The term strategy is derived from the Greek word strategia, meaning “generalship’
2. Strategy is all about integrating organizational activities and utilizing and
allocating the scarceresources within the organizational environment so as to
meet the present objectives.
3. While planning a strategy it is essential to consider that decisions are not taken
in a vacuum andthat any act taken by a firm is likely to be met by a reaction
from those affected, competitors, customers, employees or suppliers.
4. Strategy may be defined as the direction and scope of an organisation over the long
term, which achieves advantage for the organisation through the configuration of
resources within a changingenvironment and to fulfil stakeholder expectations.

Characteristics of Strategy or Strategic decision.

1. Strategy is likely to be concerned with the long-term direction of an organization.
2. Strategic decisions are normally about trying to achieve some advantage for the
organization overcompetition.
3. Strategic decisions are concerned with the scope of the organization’s activities.
4. Strategy can be seen as matching the resources and activities to the
environment in which itoperates.
5. Strategy can be seen as stretching an organisation’sresources and competencesto
create new
opportunities or to capitalise on them
6. Strategies may require major resource changes for an organization.
7. Strategic decisions are likely to affect operational decisions.
The strategy of an organization is affected not only by environmental forces and resource
availability but also by the values and expectations of those who have power in and around
the organization

“A typical business form usually considers three types of

Strategy” – Discuss.
A typical business firm usually considers three types of strategy

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 1. Corporate strategy: It is concerned with the overall purpose and scope of an
organisation and how value will be added to the different parts (business units) and
product lines of the organisation. Corporate strategies typically fit within the three
main categories of stability, growth and retrenchment. Decisions include investment
in diversification, vertical integration, acquisitions, new ventures, the allocation of
resources between the different businesses of the firm and divestments.

2. Business strategy: It is about how to compete successfully in particular markets. It

emphasises improvement of the competitive position of a organisation’s products or
services in the specified industry or market segment served by that business unit.
These strategies fit within the two overall categories namely, competitive and
cooperative strategies.

3. Functional strategy or Operational Level Strategy: It is concerned with how the

component parts of an organisation deliver effectively the corporate and business
level strategies in terms of resources, processes and people. It is concerned with
developing and nurturing competence to provide a business unit with a competitive
advantage. These strategies are taken at the functional level directed towards
maximising resource productivity. It may be mentioned that organisations use all the
three types of strategies simultaneously. The term ‘hierarchy of strategy’ is
commonly used to explain the nesting of one strategy within another so that they
complement and support one another. It also refers to the grouping of strategies by
level in the organisation. Functional strategies support business strategies, which in
turn support the corporate strategy.
What do you mean by Strategic management and its Characteristics?
1. It refers to a set of managerial decisions and actions that determines the long term
performance ofan organisation.
2. Originally called ‘corporate planning’, the shift from ‘corporate planning’ to what
became termed as ‘strategic management’ was associated with increasing focus on
competition.
Strategic
Management

Environmental
Scanning Formulation Implementation

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  Environmental scanning:

1. It refers to the monitoring, evaluating and disseminating of information from

the external andinternal environments to key people within the organisation.
2. The purpose is to identify the strategic factors both internal and external
elements that will shape the future of the organisation.
3. The range of methods and techniques available for environmental scanning is wide.

 Strategy Formulation:

1. It refers to the development of long range plans for the effective management of
environmental opportunities and threats, in the light of corporate strengths and
weaknesses (SWOT).
2. It includes defining the mission, setting objectives, developing strategies and
setting policyguidelines.
 Strategy Implementation:

1. It is the process by which strategies and policies are put into practise though the
development ofprograms, budgets and procedures.
2. This includes day to day decisions in resource allocation and is typically
conducted by the middleand lower level managers with review by the top
management.
3. It involves taking actions at the functional, business and corporate levels to
execute a strategic plan.
4. Implementations include, for example, putting quality improvement programs,
changing the wayproduct is designed, positioning the product differently, market
segmentation, expanding throughmergers and acquisitions and downsizing the
company.
 Evaluation and control:
It involves the process through which organisational activities and performances are
monitored. Theactual performances are compared to the desired performances and
corrective actions are taken to resolve problems. The process of evaluation and
control helps to identify the weakness and lacunaeof the previously implemented
strategic plan and thereby, stimulates the entire process to begin again

What do you mean by Emotional Intelligence?

In order to estimate someone’s psychological capabilities Goleman (1998) used a term
called emotional intelligence. Emotional intelligence is a term that Daniel Goleman coined

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to describe a bundle of psychological attributes that many strong and effective leaders
exhibit
1. Self-awareness—the ability to understand one’s own moods, emotions, and drives,
as well as their effect on others.
2. Self-regulation—the ability to control or redirect disruptive impulses or moods,
that is, to think before acting.
3. Motivation—a passion for work that goes beyond money or status and a
propensity to pursue goals with energy and persistence.
4. Empathy—the ability to understand the feelings and viewpoints of subordinates
and to take those into account when making decisions.
5. Social skills—friendliness with a purpose.

Write the objectives of strategic Management?

1. To identify opportunities and adapt resources to exploit the opportunities created.
2. To create opportunities by stretching the resources and competences of the
organisation and capitalise them.
3. To help managers to understand the key relationships among actions, context, and
performance by providing the conceptual frameworks.
4. To help an organisation enjoy competitive advantage.
5. To sustain and improve the competitive position by the deployment and acquisition
of appropriate resources and by monitoring and responding to environmental
changes.
6. To monitor and remain responsive to the demands of key stakeholders.
7. To identify the critical success factors and meet the needs and wants of the
customers.
8. To avoid failure by focusing on the building blocks of competitive advantage (superior
efficiency, superior quality, superior innovation and superior responsiveness to
customers), instituting continuous improvement and learning, tracking the best
industrial practices and using benchmarking.
9. To overcome inertia and accept the changes in the ever-changing environment to
remain competitive and at times to survive.
10. To develop a creative and innovative attitude and to think strategically.

Explain SMART Framework?

To create effective objectives, make sure they’re specific, measurable, attainable, relevant
and time-based. These guidelines are often abbreviated using the acronym SMART. Here
are more details regarding the SMART goal framework:

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 ◉ Specific: Specific goal provides the employee with the exact result needed for their
performance to be successful. A clear objective can optimize productivity and
effectiveness.
◉ Measurable: Successful goals can usually be measured using metrics that determine an
employee’s success or progress. A quota, for example, is one way to measure an
employee’s success.
◉ Attainable: Effective goals are often those which are ambitious and also possible to
achieve. Consider if and how an employee can attain their objectives with the tools and
resources available to them within a specified time frame.
◉ Relevant: A relevant objective contributes to the larger goals of a company. Consider
the upward impact of employees achieving certain goals, like how they tie to bigger
company strategies like growth.
◉ Time Based: Set realistic timelines for employees to complete their tasks. If a task is
ongoing, you might consider your next review as a deadline for achieving objectives.
SMART goals help clarify responsibilities and ensure both manager and employee knows
what to expect. They can help develop employees’ skills and move goals forward toward
larger, higher-level goals.

Explain FAST framework?

1. It was in the year 1954 when Peter Drucker, the great management guru, introduced
“management by objectives”.
2. Management by objectives according to Drucker is an approach where employees
would agree with their boss on a set of goals and work toward achieving those
objectives throughout the year.
3. The importance of goal setting and accomplishment of objectives has been the central
for managers who follow a well-established set of practices.
4. Traditionally the managers aspired to make their goals SMART, by ensuring they are
specific, measurable, achievable, realistic, and time-bound.
5. However, over the past few decades, a handful of leading companies including
Google, Intel, etc. have pioneered and refined an alternative approach to harness the
power of goals to drive and align action.
6. The four core principles that underpin effective goal systems can be summarised into
the acronym FAST. Goals should be embedded in frequent discussions; ambitious in
scope;
7. Modern concept views goals to be FAST and not SMART.

Acronym Term Definition Advantages

F Frequently Goals should be frequently ◉ Gives guidance for important
discussed discussed in order to see decisions.
the progress, allocate ◉ Helps employees remain

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 resources as and when focused on the most
needed, prioritise of important matters.
initiatives and provide ◉ Links performance feedback
feedback to concrete goals.
◉ Evaluates the progress and
helps in course corrections.
A Ambitious Goals should be challenging ◉ Motivates performance of
or ambitious but not individuals and teams towards
impossible to achieve goal.
◉ Helps in minimising the risk
of downplaying the
achievements of the
subordinates.
◉ Focuses on the innovative
ways to achieve goals.
S Specific Goals should be translated ◉ Clearly mentions what the
into specific metrics so that employees are expected to
there is clarity in achieving deliver.
the goals ◉ Helps in easy identification of
deviations from the goals and
offers quick course
corrections.
◉ Enhances performance of
individuals and teams.
T Transparent Goals and their ◉ Use of peer pressure to
achievements should be perform on goals.
made public for all ◉ Clearly showcases the
employees to see. activities and contribution of
the employees towards goal
achievement.
◉ Helps employees understand
the agenda of other
employees and the teams.
◉ Helps to identify the
strategies those are
redundant and are not
aligned to the overall
organizational goals

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Explain the concept of Balance Score Card
The balanced scorecard: a framework to translate a strategy into operational terms.
Source: Robert S. Kaplan and David P. Norton, ‘‘Using the balanced scorecard as a strategic
management system,’’ Harvard Business Review January. February 1996

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Module- 9 Strategic Analysis and Strategic Planning

Explain the concept of PESTEL Framework?

The PESTEL framework is an extension of the PEST strategic framework, one that includes
additional assessment of the Environmental and Legal factors that can impact a business. The
PESTEL framework shows some of the macro-environmental influence which might
affect organizations. It focuses on the six principal components of strategic
significance in the macro-environment namely, political, economic, social, technology,
environmental and legal forces.
◉ Political factors
These factors determine the extent to which a government may influence the economy or
a certain industry. For example, a government may impose a new tax or duty due to
which entire revenue generating structures of organizations might change. Political
factors include tax policies, Fiscal policy, trade tariffs, etc. that a government may levy
around the fiscal year and it may affect the business environment (economic environment)
to a great extent.

◉ Economic Factors
These factors are determinants of an economy’s performance that directly impacts a
company and have resonating long term effects. For example, a rise in the inflation rate of
any economy would affect the way companies price their products and services. Adding
to that, it would affect the purchasing power of a consumer and change demand/supply
models for that economy. Economic factors include inflation rate, interest rates, foreign
exchange rates, economic growth patterns, etc. It also accounts for the FDI (foreign
direct investment) depending on certain specific industries who’re undergoing this
analysis.

◉ Socio-cultural factors
These factors scrutinize the social environment of the market, and gauge determinants
like cultural trends, demographics, population analytics, etc. An example of this can be
buying trends for Western countries like the US where there is high demand during the
Holiday season.

◉ Technological factors
These factors pertain to innovations in technology that may affect the operations of the
industry and the market favorably or unfavorably. This refers to automation, research and
development, and the amount of technological awareness that a market possesses.

◉ Environmental factors

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 They include protection laws, waste disposal, energy consumption, weather,
climate, climate change and associated factors like water shortages. These factors
can directly impact industries such as insurance, farming, energy production, and
tourism. They may have an indirect but substantial effect on other industries such
as transportation and utilities.

◉ Legal

These factors have both external and internal sides. There are certain laws that affect the
business environment in a certain country while there are certain policies that companies
maintain for themselves. Legal analysis takes into account both of these angles and then
charts out the strategies in light of these legislations. For example, consumer laws, safety
standards, labor laws, etc.

Explain the concept of PESTEL Framework?

Threat of entry will depend on the extent to which there are barriers to entry.
Barriers to entry are factors that need to be overcome by new entrants if they are to
compete successfully. These should be seen as providing delays to entry and not as
permanent barriers. The typical barriers are:
 Economies of Scale
Economies of scale arise when unit costs fall as a firm expands its output. Sources
of scale economies include cost reductions gained through mass producing a
standardised commodity, discounts on bulk purchases of raw material inputs
and component parts, the advantages gained by spreading fixed production
costs over a large production volume and the cost savings associated with
spreading marketing and advertising costs over a large volume of output. If
theses cost advantages are significant then a new company that enters the
industry and produces on a small scale suffers a significant cost disadvantage
relative to established companies.

 Brand Loyalty
Brand loyalty exists when consumers have a preference for the products of
established companies. A company can create a brand loyalty through
continuous advertising of its brand-name products and company name, patent
protection of products, product innovation achieved through company research
and development programs, an emphasis on high product quality and good after
sales service.

 Absolute cost advantages

Absolute cost advantages arise from three sources namely,
(a) superior production operations and processes due to accumulated experience,
patents, or secret processes,
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 (b) control of particular inputs required for production, such as labour, materials,
equipment, or management skills, that are limited in their supply; and
(c) access to cheaper funds because existing companies represent lower risks than
new entrants. If established companies have absolute cost advantages, the threat of
entry as a component of five forces is weaker.

 Customer Switching Costs

Switching costs arise when it cost a customer time, energy, and money to
switch from the products offered by one established company to the products
offered by a new entrant. When switching costs are high, customers can be
locked in the product offerings of established companies, even if new entrants
offer better products.

 Government Regulation
Legal restraints on competition vary from patent protection, to regulation of
markets, through to direct government action. Of course, managers in the
hitherto protected environments might face the pressures of competition for
the first time if governments remove such protection. Historically, government
regulation has constituted a major barrier into many industries

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 Explain the concept of SWOTC Analysis?
S = Strength
W = Weaknesses
O = Opportunities
T/C = Threats or Challenges
1. SWOT analysis is a technique developed at Stanford in the 1970s, frequently used
in strategic planning.
2. SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats and is
a structured planning method that evaluates those four elements of an organization,
project or business venture.
3. A SWOT analysis is a simple, but powerful, framework for leveraging the
organization's strengths, improving weaknesses, minimizing threats, and taking the
greatest possible advantage of opportunities
4. SWOT analysis is a process where the management team identifies the internal and
external factors that will affect the company's future performance. It helps us to
identify of what is happening internally and externally, so that you can plan and
manage your business in the most effective and efficient manner.
5. While finalising the corporate plan together with corporate objectives, growth
strategies, it would be necessary to make a review of the corporate strengths
and weaknesses in connection with it’s mission and objectives. This is an
important managerial task linked with corporate planning process.

Corporate strengths and weaknesses can be broadly enumerated as under:

Corporate Strengths:
 Financially very sound
 Good products and product-mix with high demand including future
prospects
 Full capacity utilisation, locational advantages
 Good infrastructures
 Good industrial relations
 No political interference
 Good performance in production and services with consistent records
 Good raw materials base
 Incentives from State Government
 Good relation with Government departments
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  Technologically rich and with expertise
These are the corporate strengths within and outside the organisation.

Corporate Weaknesses:
Similar to Corporate strengths, there may be corporate weaknesses too. These may
be enumerated as under:
 Under-utilisation of capacity due to economic slump
 High debt burden in the capital structure
 Poor product-mix
 Lack of managerial strengths
 Technology gap
 Demand gap
 Poor infrastructures
 Raw materials source at a distance
 Lack of latest information technology
 Competition war
Both corporate strength and corporate weaknesses are examined and reviewed
together in connection with corporate mission and objectives. A balanced and
appropriate mix from both strengths and weaknesses is made in order to
formulate a good corporate plan, which can be achieved and fulfilled during it’s
entire plan period
Now we outline the ‘opportunities’ and ‘threats’
Opportunities:
 Seasonal/climatical demand of products
 Global markets for the company’s products/services (Export opportunities)
 To explore the markets in the undeveloped/under-developed/developing
states/places
 To avail of the incentives/concessions declared by Central and State
Governments
 Diversifications opportunities
 Mergers/acquisition opportunities
 Good home market available due to boost in the economy
 Liberalised policies of the Government both at Centre as well as State level
for the individual production and industrial developments

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 Similar to opportunities, there may be threats too prevailing from time to
time, which must be examined and necessary action taken to be free from
these or to solve these prudently so that loss to the organisationmay
be minimum. The probable threats, which may arise or be facedby the
organisation, are listed out as under
Threats & Challenges:
 Globalisation
 Competition
 Price cutting war
 Free imports
 Political instability
 Quality thrusts
 High and adverse debt equity ratio
 Increase in financing cost

 Economic slow down due to international recession impact

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 Explain the concept of BCG Matrices?
The Boston Consulting Group (BCG)’s matrix analyses ‘products and businesses by market share and
market growth.’

 The Boston Consulting Group (BCG) growth-share matrix is a planning tool that
uses graphical representations of a company’s products and services in an effort to
help the company decide what it should keep, sell, or invest more in.

 The matrix plots a company’s offerings in a four-square matrix, with the y-axis
representing the rate of market growth and the x-axis representing market share. It
was introduced by the Boston Consulting Group in 1970.1

 The BCG growth-share matrix breaks down products into four categories, known as
"dogs," "cash cows," "stars," and “question marks.” Each category quadrant has its
own set of unique characteristics

Understanding the Boston Consulting Group (BCG) Matrix

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  The horizontal axis of the BCG Matrix represents the amount of market share of a
product and its strength in the particular market. By using relative market share, it
helps measure a company’s competitiveness.

 The vertical axis of the BCG Matrix represents the growth rate of a product and its
potential to grow in a particular market.

In addition, there are four quadrants in the BCG Matrix:

1. Question marks: Products with high market growth but a low market share.
2. Stars: Products with high market growth and a high market share.
3. Dogs: Products with low market growth and a low market share.

Cash cows: Products with low market growth but a high market share. The horizontal axis
of the BCG Matrix represents the amount of market share of a product and its strength in
the particular market. By using relative market share, it helps measure a
company’s competitiveness.

The vertical axis of the BCG Matrix represents the growth rate of a product and its
potential to grow in a particular market.

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 1. Cash cows

Cash cows have a high market share but a low growth rate. Which actually means they
don’t cost much but promise high returns. A good example of a cash cow is Google’s
online advertising business. They have a high market share in a saturated market and don’t
need to spend a lot to get high returns from the business.

Every business portfolio wants to maximize cash cows and is the eventual aim of all
business units.

2. Stars

Stars have a high market share and a high growth rate. They can generate some profit,
however, growth is at the expense of money and these are cash consuming. The hope is
that eventually the stars will be transformed into cash cows.

Android business for google is a Star. They have a very high market share in a high growth
market but it is consuming money.

3. Question marks

Question marks are the ‘problem child’, they have high growth potential but a low market
share. With a lot of (financial) support and strategic, they can be turned into stars.

Google plus business for Google in Social Media space was a question mark. However, it is
another matter they couldn’t turn it into a Star and eventually had to shelve it. this,
however, makes the question marks a difficult decision to make. It can go either way, it can
move to be a Star or it can move into a Dog.

4. Dogs

These are business units with a low share in a saturated market. Dogs should be held on to
only if they have a value other than a financial one (e.g. a vanity project or favor for a
friend).

Online blogging platform Blogger for Google can be an example of Dogs. It is operating in a,
now obsolete user-generated blogging space but still has a much lower market share.
Whether Google is going to liquidate the business is to be seen.

Limitations of BCG Matrix

The BCG Matrix produces a framework for allocating resources among different business
units and makes it possible to compare many business units at a glance. But BCG Matrix is
not free from limitations, such as-

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 1. BCG matrix classifies businesses as low and high, but generally businesses can be
medium also. Thus, the true nature of business may not be reflected.
2. Market is not clearly defined in this model.
3. High market share does not always leads to high profits. There are high costs also
involved with high market share.
4. Growth rate and relative market share are not the only indicators of profitability.
This model ignores and overlooks other indicators of profitability.
5. At times, dogs may help other businesses in gaining competitive advantage. They can
earn even more than cash cows sometimes.
6. This four-celled approach is considered as to be too simplistic.

Analyze the steps in a formal strategic planning process?

The formal strategic planning process has five main steps:

Select the corporate mission and major corporate goals

The first component of the strategic planning process is crafting the organisation’s mission
statement, which provides the framework or context within which strategies are
formulated. A mission statement has four main components: a statement of its reason for
existence which is normally referred to as the mission; a statement of some desired future
state, usually referred to as the vision; a statement of the key values that the organisation is
committed to; and a statement of major goals.

Analyse the organisation’s external competitive environment to

identify opportunities and threats
The second component of the strategic planning process is an analysis of the organisation’s
external operating environment. The essential purpose of the external analysis is to identify
strategic opportunities and threats within the organisation’s operating environment that will
affect how it pursues its mission. Three interrelated environments should be examined
when undertaking an external analysis: the industry environment in which the company
operates, the country or national environment and the wider socioeconomic or macro
environment.

Analyse the organisation’s internal operating environment to identify

the organisation’s strengths and weaknesses
Internal analysis, the third component of the strategic planning process, focuses on
reviewing the resources, capabilities, and competencies of a company. The goal is to identify

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 the strengths and weaknesses of the company. The next component of strategic thinking
requires the generation of a series of strategic alternatives, or choices of future strategies
to pursue, given the company’s internal strengths and weaknesses and its external
opportunities and threats. The comparison of strengths, weaknesses, opportunities, and
threats is normally referred to as a SWOT analysis. More generally, the goal of a SWOT
analysis is to create, affirm, or fine-tune a company-specific business model that will best
align, fit, or match a company’s resources and capabilities to the demands of the
environment in which it operates.

Select strategies
Managers select strategies that build on the organisation’s strengths and correct its
weaknesses in order to take advantage of external opportunities and counter external
threats. In order to select the right strategies managers compare and contrast the various
alternative possible strategies against each other and then identify the set of strategies that
will create and sustain a competitive advantage. It is very important for the strategic
managers to keep in mind that the strategies selected should be consistent with the mission
and major goals of the organisation. They should be congruent and constitute a viable
business model.

Implement the strategies

In order to achieve a competitive advantage and increase profitability managers must put
those strategies selected into action. Strategy implementation involves taking actions at the
functional, business, and corporate levels to execute a strategic plan.
Implementation can include, for example,
◉ putting quality improvement programs into place
◉ changing the way a product is designed
◉ positioning the product differently in the marketplace
◉ segmenting the marketing and offering different versions of the product to different
consumer groups
◉ implementing price increases or decreases
◉ expanding through mergers and acquisitions
◉ downsizing the company by closing down or selling off parts of the company

Explain Critical Success Factors?

Critical success Factors are those product features that are particularly valued by a group
of customers, and, therefore, where the organisation must excel to outperform
competition.

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 Major Sources of CSFs
Rockart has identified four major sources of CSFs
◉ Structure of the Industry: Some CSFs are specific to the structure of the industry
for e.g., the extent of service support expected by the customers. Automobile
companies have to invest in building a national network of authorizes service stations
to ensure service delivery to their customers.

◉ Competitive strategy, industry position and geographic location: CSFs also

arise from the above factors for e.g. the large pool of English- speaking manpower
makes India an attractive location for outsourcing the BPO needs of American and
British firms.

◉ Environmental Factors: CSFs may also arise out of general/business environment

of a firm, like the deregulation of Indian industry. With the deregulation of
telecommunication industry, many private companies had opportunities of growth.

◉ Temporal factors: Certain short-term organisational developments like sudden

loss of critical manpower (like the charismatic CEO) or break-up of the family owned
business, may necessitate CSFs like ‘appointment of a new CEO’ or ‘rebuilding the
company image’. Temporarily such CSFs would remain CSFs till the time they are
achieved. In the process of developing alternatives, it may be useful to narrow down
the range of options by identifying the more promising alternatives, in the light of the
Critical Success Factor (CSFs). The options relevant to those factors may be analyzed
along with a forecast of their outcome

Module-10 Formulation and Implementation of Strategy

Explain different types of Structures

Functional structure:
The functional structure is characterized by the simultaneous combination of similar
activities and the separation of dissimilar activities on the basis of function. All Cost
Accountants are located in the Cost Accounting Department, and the HOD of Cost
Accounting is responsible forall cost related activities. The same is true in marketing,
research and development, and manufacturing. The functional organization form is one of
the most common organizational structures found in firms pursuing strategy of
concentration or very high relatedness. A functional structure is most appropriate when
the organization is small to medium size and relatively stable.

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 Matrix structure:
Another way to achieve focus on multiple outcomes is with the matrix structure. The
matrix structure creates a dual chain of command; two lines of budget authority and
two sources ofperformance and reward. The key feature of the matrix is that product
(or business) and functional lines of authority are overlaid to form a matrix or grid,
between the product manager and functional manager.

Multidivisional Structure
A multidivisional structure is built up of separate divisions on the basis of products, services
or geographical areas. Divisionalisation often comes about as an attempt to overcome the
problems that functional structures have in dealing with the diversity mentioned above.
Each division can respond to the specific requirements of its product/ market strategy, using
its own set of functional departments.

The transnational structure

The transnational structure seeks to obtain the best from the two extreme international
strategies, the multi domestic strategy and the global strategy. A global strategy would
typically be supported by global product divisions; a multi domestic strategy would be
supported by local subsidiaries with a great deal of design, manufacturing and marketing
autonomy for all products. The transnational structure, however, attempts to achieve both
high local responsiveness and high global coordination. The transnational is like a matrix but
has two specific features: first, it responds specifically to the challenge of
internationalisation; second, it tends to have more fixed responsibilities within its
crosscutting dimensions.

Analyze the advantages and disadvantages of Project – based

structures.
A project-based structure is one where teams are created, undertake the work and are
then dissolved. This can be particularly appropriate for organisations that deliver large and
expensive goods or services (civil engineering, information systems, films) or those
delivering time-limited events (conferences, sporting events or consulting engagements).
The organisation structure is a constantly changing collection of project teams created,
steered and glued together loosely by a small corporate group. Many organisations use such
teams in a more ad hoc way to complement the ‘main’ structure. For example, taskforces
are set up to make progress on new elements of strategy or to provide momentum where
the regular structure of the organisation is not effective.

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Advantages of Project-based structures
◉ The project-based structure can be highly flexible, with projects being set up and
dissolved as required.
◉ Accountability and control are good because project teams should have clear tasks to
achieve within a defined life.
◉ Projects can be effective at knowledge exchange as project team members will
typically be drawn from different departments within the firm.
◉ Projects can also draw members internationally and, because project life spans are
typically short, project teams may be more willing to work temporarily around the
world.
Disadvantages of Project-based structures
◉ Without strong programme management providing overarching strategic control,
organisations are prone to proliferate projects in an ill-coordinated fashion.
◉ The constant breaking up of project teams can also hinder the accumulation of
knowledge over time or within specialisms.

Categorize major reasons of SBU approach.

SBU groups similar divisions into “Strategic Business Units” and then delegate’sauthority
and responsibility of each unit to a senior executive who is normally identified as CEO or
MD of that SBU. It is an extension of Divisional structure

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 SBU Structure Big organisation like Unilever, etc have many SBUs for their different
categories of products like Cosmetics, Food products and Beverages, etc, and each is
managed through separate unit head.

Advantages:

 Promotes accountability since units’ heads are responsible for individual SBU
profitability
 Career development opportunities are further higher in this structure
 Allow better control of categories of products manufacturing, marketing and
distributions
 Helps to expand in different related and unrelated businesses
Disadvantages:

 May provide inconsistent approach to tackle customers, etc, because eachunit

may work in it’s own way to handle situations
 High cost approach

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What do you mean by goal congruence? Discuss five
areas that have the ability to create goal congruence.
◉ Goal congruence is the term that is used to describe the situation when the goals of
different interest groups coincide.
◉ The achievement of goal congruence is essential in order to increase the profitability
of the organisation and to achieve its goals.
◉ It is very important that the individual goals are consistent with the organisational
goals.
◉ It may be said that in a perfect organisation individual goals and organisational goals
should correspond perfectly.
◉ However, it is rarely the case as employees have both personal as well as
organisational goals.
◉ One way of to achieve goal congruence between shareholders and managers is by
carefully designing remuneration packages for managers which would motivate
managers to take decisions which were consistent with the objectives of the
shareholders.
The following are some of the areas that have the ability to create goal congruence:
◉ Communication and Understanding
Channels of communication and how goals are perceived are important to achieve
goal congruence. Operational managers have a responsibility of being aware as to
what actions are desirable and what goals are to be achieved. It should be
understood that the communication of different goals can occur through informal
channels, which involves meetings and face to face interactions, or through formal
channels including budgets or other financial documents. There is a inherent risk that
even if the communication is well executed, it might be perceived in different ways.
Organisations, therefore, should internalise the goals in a good manner to avoid that
employees feel inability to achieve them.

◉ Create direction
One of the reasons for lack of goal congruence is the absence of direction related to
employees’ behaviour. Performance management and goals facilitate efficient
communication about what managers want their subordinates to focus on. It needs
no mention that providing clear information and direction, employees can better
understand what is expected from them, how to perform adequately, and how to
contribute effectively to the achievement of the organisational goals. There is a need
to increase the employees understanding of the strategic objectives as well as the
organisation’s value drivers.

◉ Motivation

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 The problem of motivation can exist even though employees have knowledge about
how to perform adequately because employees can act in their own self interest
instead of in the organisation’s best interest. The employees can make their own
performance report better by allocating resources without befitting the organisation
as a whole. One of the strongest reasons for demotivation among employees and
managers is dislike for the work allocated. The reason for motivation varies among
employees. While some employees feel motivated for some recognition and
appraisals others may feel motivated because of commitment and responsibility
without any required pay off. The more motivated the employees of the organisation
the better will be the goal congruence.

◉ Incentives
In order to increase the likelihood of employees working to achieve their individual
goals, organisation’s aim to influence motivation by providing incentives. Research
suggests that individuals tend to perform better when they are rewarded. Rewards
and compensations should create goal congruence between individual goals and
organisational goals by stimulating individuals to perform by providing incentives, as
rewards are related to increased effort.

◉ Connection
It is very important to create a connection between goals, performance measures
and incentives. In order to align the employees’ self interest and overall organisational
objectives it is necessary to relate incentives with performance. By linking incentives
to certain goals, individuals tend to pay more attention to what is important.

Explain Business Processing Reengineering

◉ Business process reengineering is an approach used to improve organizational
performance by increasing the efficiency and effectiveness of processes that exist
across the organization. In addition to the redesigning of business processes, it also
involves the redesigning of associated systems and organizational structures.

◉ Usually, reasons like new market opportunities, increasing competition, poorfinancial

performance, and decreasing market share trigger the need for a business process
transformation.

◉ BPR involves the analysis and transformation of several major components of a

business. These include
a) Strategy
b) Organization
c) Process
d) Technology
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 e) Culture
◉ BPR includes three phases; analysis phase, design phase, and implementation phase. It
is also referred to as business process redesign, business process changemanagement,
and business transformation

Benefits of Business Process Reengineering

BPR plays a major role in organizational performance improvement in terms ofcost,
quality, delivery, employee productivity, etc. It also helps
 Streamline business processes and systems
 Companies easily adapt to changing times and reduce operating expenses
 Improve company profitability and sustain competitive advantage
 Boost employee productivity
 Increase customer satisfaction by improving the quality of products and
services

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Module- 11 Digital Strategy

What is Digital Strategy?

 A digital strategy, sometimes called a digital media strategy, is a plan for maximizing
the business benefits of data assets and technology-focused initiatives. A successful
digital strategy requires a cross-functional team with executive leadership, marketing
and information technology (IT) members.

 Digital strategy, on the other hand, focuses on technology, not culture. Digital
strategy is most relevant to changes in business models, and uses technology to
create the capabilities a company needs to become a digital business. Setting down a
strategy is a key component of the transformation process, and ensures that
technology is being implemented in a way that supports the business objectives.

 In scientific terms, digital technology is a technology in which information is

represented in digital form, i.e., as 0s and 1s. Some of the examples of digital
technologies are online games, multimedia, social media and mobile phones.

 In today’s organization, there are many ideas of what constitutes a digital strategy. A
marketing executive will see a digital strategy as social media and web channels. An IT
person would see a digital strategy as cloud. An operations executive will see it as
data analytics. An R&D executive would see it as online products. A financial person
will see it as online revenue channels.

What is common element of digital strategy?

◉ Choose a Leader -This is the most important part of creating a digital strategy, but
choosing the right person will depend on company culture, structure and priorities.
Whether companies place leadership with the CEO or an appointed Chief Digital
Officer, the leader’s influence will need to match the scope of digital strategy;
otherwise, it will be difficult to create the full buy-in from each department necessary
to make effective changes.

◉ Attack vs. Defend- McKinsey & Company emphasizes that companies would do
well to categorize their potential threats and opportunities in digital business, then
compare these against their own purpose. This clarifies whether a proactive or
defensive stance needs to guide new initiatives.

◉ Take a Measured Approach - Digital strategy often incorporates a process for

assessing whether new technology will really complement or grow the current
business. If you fear that your company is already behind on digital, it can be tempting

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 to rush into a project without looking at how it fits your current strategy. By taking a
measured approach, you can avoid wasting resources on initiatives that don’t align
with your business’s needs and priorities.

◉ Future Proof - The goal of digital transformation is to create an appropriate

foundation for digital business. This means creating an organization that can continue
to reinvent itself as necessary to keep up with changes in technology and customer
expectations. Digital strategy should be visionary enough to carry companies through
changes in the digital economy, in a way that continues to bring a digital edge to the
business.

What is Big Data?

 Big data is a collection of data that is huge in volume and is growing exponentially
with time.
 It is a data with so large size and complexity that none of traditional data
management tools can store it or process it efficiently.
 Big data is also a data but with huge size. Examples of Big Data include stock
exchange, social networking site, jet engine, etc.
 There are three types of Big Data namely, structured, unstructured and semi-
structured.

◉ A ‘structured data’ is any data that can be stored, accessed and processed in
the form of fixed format. A lot of success has been achieved over a period of
time in developing techniques for working with such kind of data (where the
format is well known in advance) and also deriving value out of it.

◉ An unstructured data is one with unknown form or structure. In addition

to the size being huge, un-structured data poses multiple challenges in terms of
its processing for deriving value out of it.

◉ A semi-structured data can contain both the forms of data. Example of

semi-structured data is a data represented in an XML file.

What is Characteristics Big Data?

◉ Volume – Size of data plays a very crucial role in determining value out of data.
Also, whether a particular data can actually be considered as a Big Data or not, is
dependent upon the volume of data. The name Big Data itself is related to a size
which is enormous. Hence, ‘Volume’ is one characteristic which needs to be
considered while dealing with Big Data solutions.

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 ◉ Variety – Variety refers to heterogeneous sources and the nature of data, both
structured, unstructured and semi structured. During earlier days, spreadsheets and
databases were the only sources of data considered by most of the applications
however, in recent period data can be in the form of emails, photos, videos,
monitoring devices, PDFs, audio, etc.. These data also need to be analysed.

◉ Velocity – The term ‘velocity’ refers to the speed of generation of data and
processing of data to be responsive to the needs of the customers. Big Data velocity
deals with the speed at which data flows in from sources like business processes,
application logs, networks, and social media sites, sensors, mobile devices, etc. The
flow of data is massive and continuous.

◉ Variability – This refers to the inconsistency which can be shown by the data at
times, thus hampering the process of being able to handle and manage the data
effectively.

What is benefit of Big Data Processing?

◉ Businesses can utilize outside intelligence while taking decisions.
◉ Improved customer service.
◉ Early identification of risk to the product/services, if any.
◉ Better operational efficiency.

What is Cloud Computing?

◉ Cloud computing is a general term for anything that involves delivering hosted
services over the internet.

◉ These services are divided into three main categories or types of cloud computing:
infrastructure as a service (IaaS), platform as a service (PaaS) and software as a
service (SaaS).

a) IaaS providers, such as Amazon Web Services (AWS), supply a virtual server
instance and storage, as well as application programming interfaces (APIs) that
let users migrate workloads to a virtual machine (VM). Users have an allocated
storage capacity and can start, stop, access and configure the VM and storage
as desired.

b) In the PaaS model, cloud providers host development tools on their

infrastructures. Users access these tools over the internet using APIs, web
portals or gateway software. PaaS is used for general software development,
and many PaaS providers host the software after it’s developed.

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 c) SaaS is a distribution model that delivers software applications over the
internet; these applications are often called web services. Users can access
SaaS applications and services from any location using a computer or mobile
device that has internet access. In the SaaS model, users gain access to
application software and databases.

◉ A cloud can be private or public.

a) A public cloud sells services to anyone on the internet.

b) A private cloud is a proprietary network or a data center that supplies hosted
services to a limited number of people, with certain access and permissions
settings.
c) Private or public, the goal of cloud computing is to provide easy, scalable
access to computing resources and IT services. Examples of cloud computing
include Google Docs, Microsoft 365, Email services, Google Calendar, Skype,
Wats App, Zoom, etc

What are merit / benefit of Cloud Computing?

Cloud computing benefits to modern businesses including the following: Cost management:
◉ Cloud infrastructure can reduce capital costs, as organisations don’t have to spend
massive amounts of money buying and maintaining equipment. Moreover, companies
don’t need large IT teams to handle cloud data center operations because they can
rely on the expertise of their cloud providers’ teams. Cloud computing also cuts
costs related to downtime

◉ Data and workload mobility: Cloud computing allows users to access data from
anywhere with any device with just an internet connection. That means users don’t
have to carry around USB drives, an external hard drive or multiple CDs to access
their data. Users can access corporate data through smart phones and other mobile
devices, enabling remote employees to stay up to date with co-workers and
customers. End users can easily process, store, retrieve and recover resources in the
cloud. In addition, cloud vendors provide all the upgrades and updates automatically,
saving time and effort.

◉ Business continuity and disaster recovery (BCDR): The biggest worry for
organisations in the present digital landscape is data loss. Storing data in the cloud
guarantees that users can always access their data even if their devices, e.g., laptops
or smart phones, are inoperable. With cloud-based services, organisations can
quickly recover their data in the event of emergencies, such as natural disasters or

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 power outages. This benefits BCDR and helps ensure that workloads and data are
available even if the business suffers damage or disruption.

What are Demerit of Cloud Computing?

In spite of the fact that cloud computing has huge benefits yet, it has its own causes of
concern as follows:
◉ Cloud security: There is a clear lack of transparency regarding how and where
sensitive information entrusted to the cloud provider is handled. When relying on
the cloud, organisations risk data breaches, hacking of APIs and interfaces,
compromised credentials and authentication issues.

◉ Cost unpredictability: The concept Pay-as-you-go subscription plans for cloud use,
along with scaling resources to accommodate fluctuating workload demands, can
make it tough to define and predict final costs.

◉ Lack of capability and expertise: With cloud-supporting technologies rapidly

advancing, organisations are struggling to keep up with the growing demand for tools
and employees with the proper skill sets and knowledge needed to architect, deploy,
and manage workloads and data in a cloud.

◉ IT governance: The emphasis on do-it-yourself capability in cloud computing can

make IT governance difficult, as there is no control over provisioning, de provisioning
and management of infrastructure operations.

◉ Compliance with industry laws: When transferring data from on-premises local
storage into cloud storage, it can be difficult to manage compliance with industry
regulations through a third party. Management of multiple clouds: Every cloud is
different, so multi-cloud deployments can disjoint efforts to address more general
cloud computing challenges.

◉ Cloud performance: Network and provider outages can interfere with

productivity and disrupt business processes if organisations are not prepared with
contingency plans.

◉ Building a private cloud: Architecting, building and managing private clouds

whether for its own purpose or for a hybrid cloud goal can be a daunting task for IT
departments and staff.

◉ Cloud migration: The process of moving applications and other data to a cloud
infrastructure often causes complications. Migration projects frequently take longer
than anticipated and go over budget.

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 ◉ Vendor lock-in: Switching between cloud providers can cause significant issues.
This includes technical incompatibilities, legal and regulatory limitations and
substantial costs incurred from sizable data migrations.

What is Artificial intelligence?

◉ Artificial intelligence (AI) is intelligence exhibited by machines and systems, with
machines imitating functions which are mostly related with human cognition.

◉ There are three levels of AI namely; Narrow AI, General AI/human-level and Super
AI.

◉ Narrow AI refers to the current state-of-the-art with existing software that

automates a traditionally human activity and often outperforms humans in efficiency
and endurance in one specialized area, e.g., forecasting the weather, autonomous
driving, etc.

◉ General AI/human-level AI describes the capacity of machines to understand their

environment and reason and act accordingly, just as a human would in all activities
across all dimensions, including scientific creativity, general knowledge, and social
skills.

◉ Super AI, the highest level of AI, is reached when AI becomes much smarter than the
best human brains in practically every field.

◉ Super AI systems can make deductions about unknown environments.

◉ Machine learning (ML) describes automated learning of implicit properties of, or

underlying rules for data. It is a major component for implementing

◉ AI since its output is used as the basis for recommendations, decisions, and feedback
mechanisms with regards to a previously unknown situation.

◉ ML is an approach to creating AI. As most AI systems today are ML-based, the terms
are often used interchangeably-particularly in a business context.

◉ ML involves training algorithms on sample input data to optimize its performance on

a specific task so that the machine gains a new capability.

◉ Deep learning is a branch of AI. It mainly deals with neural networks that consist of
many layers, hence the name “deep.” In the last years, deep neural networks have
been the most successful AI approach in many areas.
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 ◉ AI is required for analyzing previously unavailable or indecipherable data (e.g., video
or sound which previously could only be interpreted by humans), in order to detect
quality issues.

◉ AI also has the ability to help detection and analysis mechanisms, improve its own
accuracy by continuously learning from the issues detected, and optimize
manufacturing processes by incorporating feedback and adjusting the control
parameters accordingly.

◉ It is amazing to note how much friendly a technology AI is emerging to help people in

quest for solving problems for society.

What is Block Chain?

◉ Blockchain is a shared, immutable ledger that facilitates the process of recording
transactions and tracking assets in a business network.
◉ An asset can be tangible (house, car, cash, land, etc.) or intangible (intellectual
property, patents, copyrights, branding).
◉ Virtually anything of value can be tracked and traded on a blockchain network,
reducing risk and cutting costs for all involved.
◉ The importance of block chain network systems from the fact that business runs on
information. The information should be accurate and received fast.
◉ Blockchain is ideal for delivering that information because it provides immediate,
shared and completely transparent information stored on an immutable ledger that
can be accessed only by permissioned network members.
◉ A blockchain network can track orders, payments, accounts, production and much
more.
◉ As members share a single view of the truth, one can see all details of a transaction
end to end, giving greater confidence, as well as new efficiencies and opportunities.

List the Important components of a block chain?

◉ Distributed ledger technology All network participants have access to the
distributed ledger and its immutable record of transactions. With this shared ledger,
transactions are recorded only once, eliminating the duplication of effort that’s typical
of traditional business networks.

◉ Immutable records No participant can change or tamper with a transaction after

it’s been recorded to the shared ledger. If a transaction record includes an error, a

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 new transaction must be added to reverse the error, and both transactions are then
visible.

◉ Smart contracts A smart contract is stored on the blockchain and executed

automatically. A smart contract can define conditions for corporate bond transfers;
include terms for travel insurance to be paid and much more. A smart contract acts a
set of rules and allows fastest transactions. The benefits of blockchain network

◉ Increased trust As block chain is used by only the members who are within a
defined network. This assures the members that the data being received by them is
accurate and timely data. Moreover, the confidential blockchain records will be
shared only with network members to whom one has specifically granted access.

◉ Greater security The increase security in blockchain network arises from the fact
that consensus on data accuracy is required from all network members, and all
validated transactions are immutable because they are recorded permanently. No
one, not even a system administrator, can delete a transaction.

◉ Increased efficiencies With a distributed ledger that is shared among members of

a network, time-wasting record reconciliations are eliminated. The smart contract
enables automated transactions thereby saving on time.

What is Robotic Process Automation?

◉ Robotic Process Automation (RPA) is a form of business process automation that
allows anyone to define a set of instructions for a robot or ‘bot’ to perform.

◉ RPA bots are capable of mimicking most human-computer interactions to carry out a
ton of error-free tasks, at high volume and speed.

◉ Robotic process automation is not a physical or mechanical robot.

◉ RPA is the process by which a software bot uses a combination of automation,

computer vision, and machine learning to automate repetitive, high-volume tasks that
are rule-based and trigger-driven.

◉ Robotic process automation tools are best suited for processes with repeatable,
predictable interactions with IT applications.

◉ RPA tools can improve the efficiency of these processes and the effectiveness of
services without fundamental process redesign.

◉ The benefits of RPA solutions not only reduce cost but also include:
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 a) Decreased cycle times.
b) Flexibility and scalability
c) Improved accuracy
d) Improved employee morale
e) Detailed data capture

The different types of digital marketing strategies

◉ Social Media Marketing Platforms Todays’ consumers are highly reliant on social
media platforms such as Instagram, Facebook, LinkedIn, and Snapchat. This is why it is
essential that brands are active across accounts. First, marketing teams can use these
channels to distribute paid ads and sponsored content. Each platform has a way for
marketing teams to create paid ad campaigns and segment users so these ads appear
on the feeds of target audience members. While each platform is different, most have
capabilities that allow marketing teams to place ads based on location, job title,
interests, age, etc. Social media is also a great way to promote products or resources
organically to your followers, and engage with consumers. Chances are, people that
follow your brand on social media have likely purchased from you in the past.
Interacting with them on social media or answering customer service-oriented
questions is a great way to ensure continued engagement with the brand and
cultivate positive experiences and customer loyalty

◉ Influencer Marketing Another effective way to harness digital channels to reach

target audiences is with influencer marketing. Brands can partner with celebrities,
sites, or others that are considered experts in their field, that share similar values.
Brands can then reach these influencers’ followers with branded content and offers.

◉ Email Marketing Email marketing campaigns allow organizations to stay connected

with prospects and customers, sending them customized newsletters or offers based
on past shopping history or brand engagements. If an individual has interacted with a
few of your branded touch points- like an email offer for 10 percent off the items
they have been considering, or free shipping - that may be what ultimately brings
about a conversion.

◉ Content Marketing Content marketing allows marketing teams to be proactive in

answering their users’ questions. Marketing teams create content, videos, and other
assets to answer questions or provide context to consumers throughout the three
stages of the buyer’s journey:

I. The awareness stage: Buyer realizes they have a need

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 II. The consideration stage: Buyer determines a course of action to meet this
need
III. The decision stage: Buyer decides on a product / service to purchase to meet
the need

◉ Search Engine Optimization (SEO) Marketing Search engine optimization often

goes hand in hand with content marketing. When the customer from the above
example is conducting research for which gym shoes to buy, they will probably click
on one of the first three results that appear on Google. With this in mind, the
athletic shoes’ marketing team wants to ensure their article appears in those top
results. This is done by optimizing content for user experience and ensuring the
technical elements are in place to enable search engine crawlers to easily find and
index this content

◉ Pay-per-click (PPC) Pay-per-click is a form of paid advertising that allows

marketing teams to essentially purchase traffic to their website. Marketers place ads
on websites or search engines such as Google and Microsoft Bing, and pay a fee each
time the ad is clicked on. These ads often appear at the top of the search results
page, and are typically determined by bids on specific keywords, while banner ads on
websites usually have set prices.

◉ Affiliate Marketing Affiliate marketing is similar to referral programs; it involves

working with outside individuals or companies under the agreement that they
promote your product in exchange for a commission from each sale that can be
attributed to their efforts. This is a way to cut down on costs and outsource some of
the heavy lifting of promotion; however, you’re putting your brand’s reputation in
someone else’s hands, so this type of marketing often requires more extensive
monitoring and tracking.

◉ Mobile Marketing Mobile marketing initiatives can include many of the digital
marketing strategies mentioned above, and typically will leverage a combination of
text messages, social media, email, push notifications, and mobile applications. The
importance of mobile marketing is rising, as it is expected that by 2024, the number
of mobile shoppers will rise to approximately 187.5 million users. With the clear
move to mobile, marketers need to think about how they can optimize their current
marketing efforts for mobile to be able to deliver a seamless and user-friendly
experience.

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