Q1.

Elements of Strategy (5 Elements)

Ans:

1. Arenas: Arenas are areas in which a firm will be active. Decisions about a firm’s arenas are its products & services,
distribution channels, market segments, geographic areas, technologies, and even stages of the value-creation
process. The identification of arenas must be very specific. It clearly tells managers what the firm should and should
not do.
For example Reliance Industries operates in multiple arenas, including petrochemicals, refining,
telecommunications, and retail. Their scope is diverse, covering a wide range of industries.
2. Differentiators: Differentiators are features and attributes of a company’s product or service that help it beat its
competitors in the marketplace. Firms can be successful in the marketplace along a number of common dimensions,
including image, customization, technical superiority, price, quality, and reliability.
For example Japanese automakers Toyota and Honda have done very well by providing effective combinations of
differentiators. They sell both inexpensive cars and high-end cars with high-quality features, and many consumers
find the value that they provide hard to match. However, even though the best strategies often combine
differentiators, history has shown that firms often perform poorly when they try to be all things to all consumers.
3. Vehicles: Vehicles are the means for participating in targeted arenas A firm can use one or combination of these
different vehicles to penetrate arenas. They are the means for attaining the needed presence in a particular product
category, market segment, geographic area, or value creation stage.
For Example when a firm that requires a new technology could develop it through investments in research and
development or it could form an alliance with a competitor or a supplier that already possesses the technology,
accelerating the missing piece into its set of resources and capabilities. Finally, it could simply buy another firm that
owns the technology. In this case, the possible vehicles for entering a new arena include acquisitions, alliances, and
organic investment and growth.
4. Staging and Pacing: It refer to the sequence and speed of strategic moves. This element helps identify decision
points since strategic moves don’t have a single possible pathway. Staging process depends on many factors such
as resources required carrying out the task, sometimes business need to respond quickly to grab opportunities
available,
For example Jio Launched its telecom services with affordable data plans, then gradually introduced premium
offerings like JioFiber and JioTV (staged rollout of different service tiers).
5. Economic logic: Economic logic refers to how the firm will earn a profit that is, how the firm will generate positive
returns over and above its cost of capital. Economic logic is profit creation. Earning normal profits, of course,
requires a firm to meet all fixed, variable, and financing costs. Achieving desired returns over the firm’s cost of
capital is a tall order for any organization.
For example TCS's economic logic is based on providing IT services globally with a focus on cost-effective
solutions. The company leverages its Indian talent pool to offer high-quality services at competitive prices.
Q2. Strategic Management Process
Ans:
Strategic management process are as follows:
1. Vision: Vision is a picture of what the firm wants to be and, in broad terms, what it ultimately wants to achieve.
Thus, a vision statement articulates the ideal description of an organization and gives shape to its intended future It
is a big picture thinking with passion that helps people feel what they are supposed to be doing in the organization.

Tata Vision: To be the most reliable global network for customers and suppliers, that delivers value through
products and services

2. Mission: A mission specifies the business or businesses in which the firm intends to compete and the customers it
intend to serve. It could also specify what impact the firm seeks to create in the broader society it serves.

Relationship between Vision and Mission,

Mission statement flows from the Vision.

Tata Mission: To improve the quality of life of the communities we serve globally, through long-term stakeholder
value creation based on Leadership with Trust'.

3. Goal: Goals denote what an organization hopes to accomplish in future. They represent the future state or outcome
of effort put in now. Objectives are the ends that state specifically how the goals shall be achieved. They are concrete
and specific in contrast to goals that are generalized. Objectives makes the goals operational.

4. Philosophy: A corporate philosophy enlightens a company's customers and employees of the

intention of the organization, helping to build more meaningful relationships. A business owner should spend time
developing a philosophy that aligns his goals and vision for his business

5. Policies: Policies are guidelines or rules set by an organization to govern its actions and decision-making. They
provide a framework for consistent and compliant behavior. To ensure consistency, fairness, and adherence to
ethical and legal standards in the organization's operations. Policies help in translating the organization's philosophy
into practical guidelines.
Q3. Different Type of Strategic (IIDD)
Ans:

Integration Strategy : Integration strategy" is a broad term referring to how an organization connects and aligns
different parts of its operations to achieve its overall goals.

 Forward Integration- Forward integration is a business strategy where a company expands its operations to gain
control over later stages in its value chain.
For example Apple: Owning its retail stores allows for a controlled customer experience and better integration with
its hardware and software products.

 Backward Integration- Backward integration is a business strategy in which a company expands its activities to
control and manage its inputs or sources of raw materials.
For Example Ford: Builds many of its car parts in-house, leading to cost savings and greater control over quality.

 Horizontal Integration- It means when a company increases its production or market share by acquiring or
merging with other companies in the same industry offering similar products or services.
For example Google: Acquired YouTube, Gmail, and Drive, strengthening its position in the online advertising
and search engine markets.
Intensive Strategy :Intensive strategies focus on increasing the market share and competitiveness of existing products
or services.

 Market Penetration- Market penetration involves increasing sales of existing products or services in the current
market without changing the product itself..
For Example McDonald's offering new menu items to existing customers.

 Market Development- A market development strategy is a business growth strategy that focuses on introducing
existing products or services to new markets
For Example Netflix: Initially a DVD rental service, transitioned to online streaming and expanded its global reach.

 Product Development- A product development strategy is creating and launching new products or significantly
improving existing ones.
For Example Amazon: Expanding into new product categories like grocery delivery and healthcare, adapting to
customer needs.
Diversification Strategy: Diversification is a business strategy that involves entering new markets or developing new
products or services to reduce reliance on existing markets.

 Concentric Diversification- Concentric diversification is a growth strategy where a company expands by adding
new products or services that are related to its existing offerings.
For Example Creating theme parks and entertainment experiences based on its popular movie and TV franchises.

 Horizontal Diversification- Horizontal diversification is a business strategy in which a company expands its
product or service offering into new segments that are unrelated to its existing products or services but are still
within the same industry or market.
 For Example Reliance Industries Limited started as a textile company and later diversified horizontally into
various industries.

 Conglomerate Diversification- Conglomerate diversification is a strategic approach where a company expands

its product or service portfolio by acquiring or developing businesses completely unrelated to its existing core
business.
For Example Tata Group: Has interests in diverse industries like automobiles, chemicals, IT, and retail, all
operating under one umbrella.
Defensive Strategy: A defensive strategy in business focuses on protecting existing market share, profitability, and
competitive advantage in the face of challenges or threats.

 Retrenchment - A retrenchment strategy is a defensive business strategy that involves reducing the size, scope, or
diversity of a company's operations.
For Example HUL This consumer goods giant faced challenges like intense competition and changing consumer
preferences. HUL responded with a retrenchment strategy

 Divestiture - A divestitures strategy involves partially or completely selling off assets or businesses that no longer
align with a company's core vision or strategic objectives.
For Example L& T Sold its stake in Mindtree, an IT services company, in 2021. This move allowed L&T to
unlock value in its IT portfolio and focus on its own IT services arm, L&T Infotech.

 Liquidation- A liquidation strategy involves selling off a company's assets to turn them into cash and ultimately
dissolve the business.
For Example Kingfisher Airlines eventually succumbed to its financial woes and was liquidated in 2012. Its
assets, including aircraft and airport slots, were sold off to pay creditors and settle outstanding debts.
Q4. Porters Generic Strategies
Ans:

1. Low Cost Leadership Strategy : Striving to achieve lower overall costs than rivals on comparable product that
attract a broad spectrum of buyers. Successful low-cost leaders, who have the lowest industry costs, are
exceptionally good at finding ways to drive costs out of their businesses and still provide a product or service that
buyers find acceptable. To achieve a low-cost edge over rivals, a firms cumulative costs across its value chain must
be lower than competitors’ cumulative costs.
For Example Wal-Mart's Strategy
 Instituting extensive information sharing with vendors via online systems
 Global procurement
 Investing in state-of-the-art automation at its DC
 Optimizing product-mix
 Installing Security Systems
 Negotiating Rentals
 Compensating its Workforce

2. Broad Differentiation Strategy : Differentiation strategies are attractive whenever buyers’ needs and preferences
are too diverse to be fully satisfied by a standardized product offerings. A differentiation strategy calls for a customer
value proposition that is unique.
For Example
 Unique Taste: Red Bull,
 Multiple Features: Microsoft Office, Apple iPad
 Wide Selection: Home Depot, Amazon
 Superior Service: Ritz- Carlton, Nordstrom
 Engineering design & performance: Merc & BMW
 Luxury and Prestige : Gucci & Rolex
 Product Reliability: Whirlpool & Bosch
 Quality Manufacture : Michelin & Honda

3. Focused Low Cost Strategy: A focused strategy based on low cost aims at securing a competitive advantage by
serving buyers in the target market niche at a lower cost and lower price than those of rival competitors. The only
difference between a low-cost provider strategy and the focused low-cost strategy is the size of the buyer groups.
For Example Aravind Eye Care System
 Cataract Surgery made affordable:
 Largest eye care provider
  High volume and high efficiency
 300000 surgeries in a year
 2.6 million out- patients

4. Focused Differentiation Strategy: Focused differentiation strategies are keyed to offering products or services
designed to appeal to the unique preferences and a need of the narrow, well defined group of buyers.
For Example Popchips
 Brand and Distribution
 Low-fat snack
 Samples to key tastemakers who tweet, blog or recommend

5. Best Cost Provider Strategy: Best-cost provider strategies are a hybrid of low-cost provider and differentiation
strategies that aim at providing desired quality/features/performance/service attributes while beating rivals on price.
To profitably employ a best-cost provider strategy, a company must have the resources and capabilities to upscale
attributes into its product offering at a lower cost than rivals.
For Example Toyota : Lexus
 Designing an array of high performance characteristics and upscale feature
 Transferring Toyotas ability in Lexus
 Under price as compared to Merc and BMW
 Establishing a new network with personalised and attentive customer service
Q5. 7S Model
Ans:
The McKinsey 7-S model involves seven interdependent factors which are categorized as either "hard" or "soft"
elements:
Hard Elements : "Hard" elements are easier to define or identify and management can directly influence them: These
are strategy statements; organization charts and reporting lines; and formal processes and IT systems
Strategy
Structure
Systems

Soft Elements: "Soft" elements, on the other hand, can be more difficult to describe, and are less tangible and more
influenced by culture. However, these soft elements are as important as the hard elements if the organization is going to
be successful.
Shared Values
Skills
Style
Staff
1. Strategy: This is the plan devised to maintain and build a competitive advantage over the competition. It answers
the question: "How do we compete in the market? For Example Tata Consultancy Services (TCS) has a strategy
focused on global IT services and consulting, with an emphasis on innovation and digital transformation.

2. Structure: This refers to the way the organization is organized, including its hierarchy, reporting lines, and how it
divides and groups its tasks and activities. For Example Infosys has a flat organizational structure, which encourages
communication and collaboration across different departments and levels

3. Systems: These are the procedures, processes, and routines that characterize how the work is to be done. It includes
both formal and informal processes. For Example The reservation system used by Indian Railways is a complex but
effective system that manages ticketing, scheduling, and passenger information.

4. Skills: The capabilities and competencies that exist within the company. This includes the skills and knowledge of
employees at all levels. For Example The Indian Institutes of Technology (IITs) are renowned for producing highly
skilled engineers, contributing significantly to India's technological capabilities.

5. Staff: This refers to the personnel and their overall capabilities. It includes the number of employees, their roles,
and how they are rewarded and developed. For Example The employee engagement and development programs at
Hindustan Unilever focus on nurturing talent and ensuring a motivated workforce.

6. Style: This represents the leadership style of the organization and its leaders. It includes the overall culture and how
key managers operate in terms of management style. For Example The leadership style of Ratan Tata, former
Chairman of the Tata Group, is known for its visionary and ethical approach, emphasizing long-term sustainable
growth.

7. Shared Values: Also referred to as "superordinate goals," these are the core values of the organization that are
enduring and do not change. They influence the company's culture and priorities. For Example The cooperative and
community-oriented values of Amul (Gujarat Cooperative Milk Marketing Federation) are deeply embedded in its
organizational culture.