Vision (QUIZ)

A sense of higher purpose

Where there is no vision people perish vision is all about values. If you are driven
by values you will have sustainable growth. Your survival will be short lived.
-MBA mission statement
Flaw in the statement Flaw is the creation of knowledge you dont create
knowledge but accumulate knowledge, discover it. If man could create knowledge
he would be able to create another universe
Process of mission statement :
We assume that people know their business
Form of committee senior executives of the second tier
Facilitators provide sample mission statements
With these statements, they have to prepare their own draft statements
Facilitator will collect and compile them together compile draft
There will be a back and forth review and then the final version will appear on which
all will have agreed and then take it to the next lower level until it cascades down
and all are involved .
Creation of knowledge create that knowledge then you invent on the basis of that
knowledge that exist
If someones mission is to make money then they will cut back on cost on quality,
they will run into trouble
Knowledge is created by the one who says be, be done - formulation,
implementation and evaluation are all overlapping and happening immediately.
There is no distance between thinking and realization.
Chapter 3 External environment:
Quotes:
run faster than your competitor Must you always run faster than your competitors or must run at a pace to attain
your goals?
You should attain your own goals. Otherwise you are playing to someone elses
goals. run faster than you competitor would not be your goals but they will be
competitors goals. Even if the environment is changing you may have your own
goals.

e.g when steve jobs made a comeback he wasnt trying to outrun the competitors,
he had his own goals and when he pursue his own goals he was able to outrun his
competitors.
AW drinks had their own goals and not compete coca cola
Microwavable burgers not competing mcdonals, had thee own goals.

China producing at low cost not because they are lowring their cost to become
competitive, they not only do product related RnD but also process related RnD able
to lower the cost. they also do innovation Rnd in their work methods . You dont
reduce cost to be competitive this is by default.
In America outsourcing leads to compromising cost.
Porters 3 strategies
-

Differentiation
Focus
Cost competitiveness

Cost competitive comes because of value chain analysis, and process related RnD.
Also through specialization and technological development. Tech dev you have
power plant and steel mills that will give you low cost even with shorter production
runs. Not because of an arbitrary decision to lower the cost.
Focus is not on your competitors but on your own goals, on your vision and mission
and goals but do keep in mind the strategies of the competitors.
Competitive analysis - (cluster Analysis)
-

Draw a strategic Map different variables e.g price and quality clusters at
the lower end , the middle and the upper end.
Identify your strategic group - 3 strategic groups. Identify your one Identify 2-3 major competitors from within the group, another group and
outside the industry
Do competitive Intelligence on them, compare your CI on them and do key
porters 5 forces, one of the aspect of competitive analyses
Draw IFE, EFE and CPM
Then write an analytical essay on the above basis and becomes a part of
comp analysis write up

Why is a firm have to do competitive analyses - because you have to watch your
competitor landscape and make a response to it.
Business is not on a racing track to achieve strategic goals. you need to make sure
that you make the appropriate response to competitive forces not to outrun them
but to attain your goals.

What is the difference between CI and espionage?

Espionage: accessing file that you should not be accessing. You are not suppose to
use info even in interviews. Through unethical means
CI - only information that is publically available and through ethical means . CI is
that for competitive analysis you review information that is generally available. All
the published resources.
3rd definition of SM : Allocation of superior resources against a decisive opportunity.
Not just allocation of resources but superior resources. A decisive opportunity that
will enable you to attain your goals.
How is external audit done?
What are the external forces ?
10 forces economical, cultural , social, demographical, natural environment, legal,
governmental, political, technological, competitive, terrorism, religion, extortion, law
and order
Terrorism:
Religion: business response to it . e.g Islamic banking, mcdonalds using vegetable
oil, shariah airline, hilal foods.
Extortion: trading community having to put up with in the city, - they kept on
lobbying till some action was taken.
Law and order security, and business doing good business,
External audit done?
You list you Os and Ts and from these you develp CSf critical success factors
CSf: the means to achieve your goals. these are actionable responses to your Os
and Ts.
How to construct your EFE matrix:
List the most important opportunities and the most important threats
CSf that responds to Os and CSf to avert Ts and then you assign weights to them.
Weights vary from 0.1 to 1 and then give ratings. Ratings how responsive the firm
is on that particular CSf.
4th coloumn multiplying the 2 before then you add them all up to get a cumulative
score. Average score is 2.5

IFE - you list the CSf that would act to your strengths and help overcome your
weaknesses and similarly weights and ratings. The cumulative score will tell you 1
to 4 where 1 means weak internally and 4 as strong with 2.5 average score.

CPMList CSf of EFE and IFE and then second coloumn weights and then companies.
Cumulative score will tell which company is more competitive. To know the
individual breakdown you will look at the individual score.
Subjectivity in marketing forecast:
What are the methods of prepareing forecast
Quanititve methods regression model weakness - looks at past data and assume
a straight line.
Delphi technique - ask the experts, ask for their assessment of forecast , then you
receive their estimates, the you study how close they are and you ask for an
explanation from them and then you round it of eventually. Considered to be the
most objective.
Also by preparation of IFE, EFE and CPM, assign weights , and then you check it out
with other experts, and assign rating also. You come as close as possible to prepare
and objective EFE, CPM etc.
Subjectivity would then be ruled out to large extend.
Subjective is when you are predisposed. Looking at it with your own ideological lens,
being biased and prejudiced. Then it is a dependent view.
Quantitative analysis are not always objective: depends upon the assumptions
behind and they may not be objective. So you cant say results are objective e.g
inflation rate you can change the basket of goods, change the year- depends upon
the massaging of data.
Qualitative analysis are not always subjective: if you can defend it before an
independent audience. so subjectivity gets eliminated. E.g appraisal one being
upraised accept it and is not dissatisfied by it and not start a whispering campaign.
It should be transparent, accountable and you can defend it in front of independent
audience.
By ruling out subjectivity you can make you EFE and CPM objective.

Forces and business response

Economies of scale as an internal factor e.g steel mills and power plant because
they gave economies on a very large volume and no pvt sector wished to invest.
Now by tech development you can achieve economies of scale in pvt sector.
Bargaining power of suppliers (learn all 5 though. Didnt discuss this much here)
From articles what is the classic example of making a very effective response to
certain external factors

Japanese - oil crises they then produced fuel efficient they changed the
paradigm of automobile manufacturing. Also in earth moving industry etc.
Naya daur mototrs - diesel prototypes - American motors took the idea and they
became the first one to product them. Classic example of policy failure.
The business should go and get themselves involve and make a case otherwise you
suffer.
Economic factors doesnt mean projected growth rate,GDP, inflation etc but see the
what is the direction of the economic policy that needs to be influenced. E.g NAFTA
by the business community.
Days are gone when one said economics is none of our business - it is your business
it influences your business so you make it your business.