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Similar to Fundamentals of management ppt
Fundamentals of management ppt
- 1. Submitted To:- Dr. AnupamaPaliwal Submitted By:- Vipul Rajpurohit Surbhi Tiwari Sunil Choudhary Vaishali Tomar Vaibhavi Sharma Vedika Shukla
- 2. A method orplan chosen to bring about a desired future, such as achievement of a goal or solution to a problem. The art and science of planning and marshalling resources for their most efficient and effective use. The term is derived from the Greek word for generalship or leading an army. 2
- 3. Features Of Strategy It is generally long-run in nature. It discounts the future to analyse its impact on present activities. It is an action plan and more specific than objectives. It is a single-use plan made for non-repetitive activities. It provides direction to goals. It is formulated by top-level managers and provide a guide for middle and lower-level managers to make sub-strategies. It coordinates organization’s internal environment with the external environment. It enables the firm to outperform the competitors. 3
- 4. Benefits Of Strategy Benefitsof strategy Ressource allocation Competitive advantage Broad improvement Customer focus ConsistencyThinking Opportunities & threats Change ready Improved communication Conflict reduction 4
- 5. Strategic Intent • Vision •Mission • Objectives Strategy Formulation • SWOT Analysis • Corporate- level strategy • Business- level strategy • Strategic plan Strategy Implementation • Project • Procedural • Resource allocation • Structural • Behavioral Strategic Evaluation • Analysis and assessment 5
- 6. TYPES OF STRATEGIES Typesof Strategies Integration Strategies Intensive Strategies Diversification Strategies Defensive Strategies 6
- 7. INTEGRATION STRATEGIES Integration Strategy Vertical Integration Forward Backward Horizontal Integration • Integration strategyis also called management control strategy. • Integration strategies allow a firm to gain control over distributors, suppliers or competitors. 7
- 8. INTENSIVE STRATEGIES Market Penetration Market Development Product Development Intensive Strategies The aimof intensive strategies is to broaden the market share and to increase the profit by making the existing products more effective and by introducing new and various sets of products in order to increase the market share too. The strategies require intensive efforts if a firm’s competitive position with existing products is to improve. 8
- 9. DIVERSIFICATION STRATEGIES A diversification strategyis the strategy that an organization adopts for the development of its business. This strategy involves widening the scope of the organization across different products and market sectors. The strategy is to enter into a new market or industry which the organization is not currently in, whilst also creating a new product for the new market. Diversification Strategies Related Diversification Unrelated Diversification 9
- 10. DEFENSIVE STRATEGIES Defensive Strategies Joint Venture Divestiture Liquidation Primarypurpose is to make possible attacks unattractive or discourage competitors. It is a strategy that can be used to keep up top position in local and existing market. This strategy is mostly successful to keep up the customer’s confidence which no new competitor can disturb. 10
- 11. 3 Levels ofStrategy Corporate Business Functional 11
- 12. CORPORATE LEVEL STRATEGIES • Theoverall scope and direction of a corporation and the way in which its various business operations work together to achieve particular goals. • Corporate level strategies are basically about decision related to: Allocating resources among the different businesses to others. Transferring resources from set of businesses to others. Managing and nurturing a portfolio of businesses. 12
- 13. TYPES OF CORPORATE STRATEGIES StabilityStrategies Expansion Strategies Retrenchment Strategies Combination Strategies 13
- 14. Characteristics Of CorporateStrategy It is formulated at the top level management, though middle and lower level managers are associated in their formulation and in designing sub-strategies. It is generally meant to cope with a competitive and complex environment. It provides unified criteria to managers in the function of decision making. It is intended to handle complexity and reduce uncertainty of the environment. It is generally long range in nature, though it is valid for short-range situations. It is concerned with perceiving opportunities and threats and seizing initiatives to cope with them. 14
- 15. BUSINESS LEVEL STRATEGIES Business-level strategy focuses on how to attain and satisfy customers, offer goods and services that meet their needs, and increase operating profits. To do this, business-level strategy focuses on positioning itself against competitors and staying up-to-date on market trends and technology changes. Customers are the foundation or essence of a organization’s business-level strategies. Who will be served, what needs have to be met, and how those needs will be satisfied are determined by the senior management. Who are the customers? Demographic, geographic, lifestyle choices (tastes & values), personality traits, consumption patterns (usage rate & brand loyalty). 15
- 16. What arethe goods and services that potential customers need? Knowing ones customers is very important in obtaining and sustaining a competitive advantage . Being able to successfully predict and satisfy future customer needs is important. How to satisfy customer needs? Organizations must determine how to bundle resources and capabilities to form core competencies and then use these core competencies to satisfy customer needs by implementing value-crating strategies. 16 BUSINESS LEVEL STRATEGIES
- 17. TYPES OF BUSINESS-LEVEL STRATEGIES 17 CostLeadership Strategy Differentiation Strategy Focus Strategy Focused Cost Leadership Strategy Integrated Cost Leadership
- 18. Cost Leadership Strategy An integratedset of action taken to produce goods or services with features that are acceptable to customers at the lowest cost, relative to that of competitors with features that are acceptable to customers. • Relatively standardized products • Features acceptable to many customers • Lowest competitive price 18
- 19. Differentiation Strategy Objective Incorporate differentiating features thatcause buyers to prefer firm’s product or service over the brand of rivals. Key to success o Find ways to differentiate that create value for buyers. o Not easily matched or cheaply copied by rivals. 19
- 20. Focus Strategy Objective o Involvesconcentrated attention on a narrow piece of the total market. o Serve niche buyers better than rivals Characteristics o Achieve LOWER COSTS than rivals in serving the segment. -- A low-cost strategy o Offer niche buyers something different from rivals. -- A differentiation strategy 20
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- 22. Boston Consulting Group(BCG) Matrix is developed by Bruce Henderson of the Boston Consulting Group in the early 1970’s. According to these technique, business or products are classified as low or high performance depending upon their market growth rate and relative market share. 22
- 23. Relative Market share& market growth To understand the Boston Matrix you need to understand how market share and market growth are inter related Market Share:- Market Share is the percentage of the total market that is being serviced by your company measured either in the revenue terms or unit volume terms. Relative Market Share:- Business Unit Sales This Year Leading Rival Sales This Year The higher your market share, the higher proportion of the market you control. 23 RMS =
- 24. Market Growth Rate Market Growth is used as a measure of a markets attractiveness. 24 MGR = Individual Sales this year – Individual Sales Last Year Individual Sales Last Year
- 25. The BCG Growth-Share Matrix25
- 26. BCG Growth -Share Matrix It is portfolio planning model which is based on the observation that the company’s business unit can be classified in to four categories. Question Marks Stars Cash Cows Dog It is based on the combination of market growth and market share relative to the next based competitor. 26
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- 28. Question Mark /Problem Children {High Growth, Low Market Share} Most business start of as Question Marks. They will absorb great amount of cash if the market share remains unchanged(low). Question Marks have potential to become Star and evenly Cash Cow but can also become Dog. Investment should be high for Question Marks. 28
- 29. Stars (High Growth, highmarket share) Stars are leader in business. They also require heavy investment to maintain its large market share. It leads to large amount of cash consumption and cash generation. Attempts should be made to hold the market share otherwise The Star Wheel become a Cash Cow. 29
- 30. Cash cows (low growth, high market share) They are foundation of the companies and often the Stars of yesterday. They generate more cash than required. They extract the profits by investing as little cash as possible. They are located in an industry that is mature, not growing or declining. 30
- 31. Dogs (low growth ,low market share) Dogs are the cash traps. High Cost – Low Quality Business is situated at a declining stage. 31
- 32. Benefits of bcgmatrix BCG Matrix is simple and easy to understand. It helps to quickly and simply screen the opportunity open to you, and help you think about how you can make the most of them. It is used to identify how corporates cash resources can best be used to maximizes company’s future growth and profitability. 32
- 33. limitations of bcgmatrix BCG Matrix uses only two dimensions : Relative Market Share Market Growth Rate Problem of getting data on market share and market growth. High market share does not mean profits all time. Business with market share can be profitable too. 33
- 34.