Introduction
Learning outcome - SHRM
Identify general principals of Strategic Management
Develop strategic options for organizations, assess those options,
select those deemed most appropriate, and justify and
communicate those decisions to others
Understand and describe the linkages between strategic
management, HR planning, and HRM practices
Identify ways that HR management operates (or could operate)
as a strategic business partner in today’s business organizations
Develop means of evaluating human resources and the
effectiveness of HR practices
Module 1
Introduction to SHRM
HR and linkage with Business goals
Learning Objective - Module 1
Principles and Process of Strategic Management
Understanding of the effective management of the
strategic functions within organizations
Understanding Strategic Human Resource Management
Strategic Management
“Strategic management is the continuous planning,
monitoring, analysis and assessment of all that is
necessary for an organization to meet its goals and
objectives”
Process flow of Strategic Management
BSC-Balanced Score Card
MBO-
Management
by Objectives
Strengths,
Weakness,
Opportunities
Threats
Few Marketplace Strategy -
Famous Billboard Wars
Airline companies
Jet Airways v/s Kingfisher
Jet Airways /Kingfisher v/s Go Air
Pepsi v/s Coca Cola
Burger King v/s McDonalds
FedEx v/s DHL
Brand Wars
Video Url:
Apple vs Blackberry Commercial War.
https://www.youtube.com/watch?v=zMFuPbUQBPQ
SAMSUNG MAKES FUN OF APPLE! IN NEW COMMERCIAL
https://www.youtube.com/watch?v=fKunpnL4g0w
MERCEDES VS JAGUAR | Very FuNNy COMMERCIAL BATTLE
https://www.youtube.com/watch?v=WLka5owmuU8
2-18
Business Strategy
Definition:
how a company will compete in its
marketplace
Competitive advantage: anything that gives a
firm an edge over rivals in attracting customers
and defending itself against competition
Sources of Competitive Advantage
To have a competitive advantage a company
must be able to give customers superior value
for their money which may come as:
Innovation
Cost
Service
Quality
Branding
Distribution
Speed
Convenience
First to market
Types of Business Strategy
Types of Business Strategy
Cost leadership strategy: be the lowest cost producer for
a particular level of product quality (Wal-Mart, Dell, Big
Bazar,Indigo,spicejet)
How do you achieve it?
Through operational excellence:
This can only be achieved with trainable and
flexible employees who avoid waste and lower
production costs
Video Url
Big Bazaar - Har Din Lowest Price
https://www.youtube.com/watch?v=mehLmm7ag0s
Contd.
Differentiation strategy: developing a product or
service that has unique characteristics valued by
customers and for which the firm may be able to
charge a premium price (Bentley Continental,
Mercedes-Benz ,Rolex, Apple)
Competitive advantage based on product
innovation
Southwest Airlines is both a cost leader and a
differentiator.
Video Url:
https://www.youtube.com/watch?v=7sWPHKU1
XZU
Porsche 911 commercial ad.
Contd.
Specialization strategy: focus on a narrow market
segment or niche and pursue either a differentiation
or cost leadership strategy within that market
segment (Starbucks, Apple)
Competitive advantage based on customer intimacy:
deliver unique and customizable products or services
to meet their customers’ needs and increase
customer loyalty.
Consulting, retail and banking strive for customer
intimacy.
Video Url:
https://www.youtube.com/watch?v=ZFb01yTR9bA
British Airways: Fueled by Love
Growth Strategy
Definition: company expansion organically
(happening as the organization expands from within
by opening new locations) or through mergers and
acquisitions .
Organic growth requires an investment in recruiting,
selecting, and training the right people to expand
the company’s operations.
Mergers and acquisitions expand an organization’s
business and can also be a way to acquire the
quality and amount of talent a firm needs to execute
its business strategy
Strategic Human Resource Management(SHRM)
Jeffrey A Mello –‘The Development of a consistent, aligned
collection of practices, programs and policies to facilitate the
achievement of the organization’s strategic objectives’
SHRM Is the Process of aligning HR strategies with
the business strategy to accomplish goals through
the employees’ competency and commitment
Requires abandoning the mindset and practices of
“personnel management” and focusing on
strategic issues than operational issues
Difference between HRM and SHRM
BASIS FOR COMPARISON HRM SHRM
Nature Reactive Proactive
Responsibility Staff specialist Line manager
Approach Fragmented Integrated
Concerned with internal and
Scope Concerned with employee relations
external relations
Time horizon Short term Long term
Basic factor Capital and products People and knowledge
Change Follows change Initiates change
Accountability Cost center Investment center
Components of SHRM
Components of SHRM
1.HR: Primary source of competitive advantage
2.Activities:HR programs and practices to get that
competitive advantage
3.Pattern and Plan: fitment of HR strategy with
Business Strategy
4.Purposeful :People, activities and plans are
directed to achievement of organization’s goals.
Benefits of Strategic Human Resource
Management
Improve Organizational efficiency
Contribute to revenue growth
Better understanding of responsibilities and
how they relate to Mission, Strategy and
Business goals by employees
Improve employee engagement, effort and
performance
Increase organizational ability to manage
change
Competitive intangibles are the source from which
competitive advantage flows.
https://www.youtube.com/watch?v=4Q2W4GvrZTk
Narayana Murthy explains why he'll take Rs 1 as salary at Infosys
Human capital is the primary source of every
competitive intangible
https://www.youtube.com/watch?v=7loEuIEjLzo
HR will be dead by 2020 (Full Video) - Vineet Nayar & Richard Rekhy at
14th National HRM Summit.
https://www.youtube.com/watch?v=sP3ZhcXOkSM
A leader must be a "people person" | Richard Branson | WOBI
Overview – VRIO Framework
VRIO Framework
Thisis a business analysis tool proposed by
Barney in 1991
This utility of this tool is determined by
applying the resource based view(RBV)
of the Organization
VRIO Model
Illustration – Walmart VRIO
Walmart VRIO
T-Temporary Advantage. SCA-Strategic Competitive Advantage
Everyday low prices:
Walmart has forever had the strong recognition
from their slogan, ‘everyday low prices’. This has
been a valuable resource and has allowed
Walmart to achieve the largest market share in
the discount retail industry. This slogan is also
a rarity within the industry. But we find that this
strategy is easily replicated. Walmart is currently
having temporary strategic advantage.
Grocery Retail
Grocery Retail: Walmart currently offers grocery
retail within their stores; this is a valuable resource
that allows them to retain large profits. This is not
a rare attribute because there is other
competition that has the same offering. This
could be easily imitated but Walmart is fully
capable of exploiting this resource.
Greeters
Walmart is the only discount retail store that offers
greeters when customers enter the store. This is
a valuable resource because it gives the consumer
a welcoming feel when they enter. This is also
a rare attribute within the industry. Any company
that tried to imitate this would face significant costs
(increased employees = increase expense).
Walmart is fully capable to organize this attribute
and exploit it to its fullest advantage.
MIS System
MISSystem: Walmart is known for having the state
of the art MIS system that allows them to keep
inventory costs low. No other retailer within the
industry has been able to organize and exploit this
resource. This is a rare, valuable resource and
could not be easily imitated. This is a fully strategic
advantage.
VRIO ASSIGNMENT - Role Play
(Problem Team Vs Solution Team)
Toyota vs Honda
Star bucks vs Cafe coffee day
Burger king vs MC Donald
Mercedes vs Jaguar
Indigo airlines vs Airasia
Apple vs Samsung
Coke vs Pepsi
