Master of Business Administration- MBA Semester 4 MB0052 Strategic Management and Business Policy - 4 Credits (Book ID: B1314)

Assignment (60 marks)

1Q ) Define the term Strategic moment Explain the importance of Strategic moment ? Ans: Strategic management is a systematic procedure of analysing, planning andimplementing strategies in an organisation to gain continued success.Importance of strategic management: To cope with changing business environment in an organisation. To formulate business activities which provide financial performance. To gain competitive advantages The Key features of strategic management are: The role of strategists involve thinking, planning and implementing relevant strategies togain long term goal in the organisation. Strategists are present at various management levels in an organisation: Top level management Board of directors Planning staff 3 Type of strategies1. Corporate level It consists of board of directors and CEO in framing strategies.The strategies are influential, pioneering and futuristic in nature. The strategies in corporate level are: Stability and expansion strategy Retrenchment strategy Corporate restructure

Concept of synergy (Combination strategy) 2.Business level It deals with formulating the objectives and allocating appropriateresources to various functional areas in the organisation. The main features of business strategies are: Business stakeholders Achieving Cost Leadership and differentiation Risk factors External risk Internal risk 3.Tactical of Functional level It consists of strategies specific to functional areasand decisions at functional level are tactical. 2Q ) Describe Porters five forces Model? Ans: Porters Five Force model Michael E. Porter has identified five competitive forces that influence every industry andmarket. The level of these forces determines the intensity of competition in an industry.The objective of corporate strategy should be to revise these competitive forces in a waythat improves the position of the organisation.Porter explains that there are five forces that determine industry attractiveness and long-runindustry profitability. These five "competitive forces" are5 - The threat of entry of new competitors (new entrants)- The threat of substitutes- The bargaining power of buyers- The bargaining power of suppliers- The degree of rivalry between existing competitors Threat of New Entrants New entrants to an industry can raise the level of competition, thereby reducing i tsattractiveness. The threat of new entrants largely depends on the barriers to entry. Highentry barriers exist in some industries (e.g. shipbuilding) whereas other industries are veryeasy to enter (e.g. estate agency, restaurants). Key barriers to entry includeEconomies of scale- Capital / investment requirements- Customer switching costs- Access to industry distribution channels- The likelihood of retaliation from existing industry players. Threat of Substitutes The presence of substitute products can lower industry attractiveness and profitability because they limit price levels. The threat of substitute

products depends on:- Buyers' willingness to substitute- The relative price and performance of substitutes- The costs of switching to substitutes Bargaining Powerof Suppliers Suppliers are the businesses that supply materials & other products into the industry.The cost of items bought from suppliers (e.g. raw materials, components) can have asignificant impact on a company's profitability. If suppliers have high bargaining power over a company, then in theory the company's industry is less attractive. The bargaining power of suppliers will be high when:- There are many buyers and few dominant suppliers- There are undifferentiated, highly valued productsSuppliers threaten to integrate forward into the industry (e.g. brand manufacturersthreatening to set up their own retail outlets)- Buyers do not threaten to integrate backwards into supplyThe industry is not a key customer group to the suppliers. Bargaining Powerof Buyers Buyers are the people / organisations who create demand in an industryThe bargaining power of buyers is greater when- There are few dominant buyers and many sellers in the industry- Products are standardised- Buyers threaten to integrate backward into the industrySuppliers do not threaten to integrate forward into the buyer's industry- The industry is not a key supplying group for buyers Intensity of Rivalry The intensity of rivalry between competitors in an industry will depend on: - The structure of competition - for example, rivalry is more intense where there aremany small or equally sized competitors; rivalry is less when an industry has a clear marketleader - The structure of industry costs - for example, industries with high fixed costs encourage competitors to fill unused capacity by price cutting - Degree of differentiation - industries where products are commodities (e.g. steel, coal)have greater rivalry; industries where competitors can differentiate their products have lessrivalry - Switching costs - rivalry is reduced where buyers have high switching costs - i.e. there isa significant cost associated with the decision to buy a product from an alternative supplier - Strategic objectives - when competitors are pursuing aggressive growth strategies,rivalry is more intense. Wher e competitors can differentiate their products have lessrivalry - Switching costs - rivalry is reduced where buyers have high switching costs - i.e. there isa significant cost associated with the decision to buy a product from an alternative supplier - Strategic objectives

- when competitors are pursuing aggressive growth strategies,rivalry is more intense. Where competitors are "milking" profits in a mature industry, thedegree of rivalry is less - Exit barriers - when barriers to leaving an industry are high (e.g. the cost of closingdown factories) - then competitors tend to exhibit greater rivalry. 3Q ) Define the term Business policy. Explain its importance? Ans: Business policies are the instructions laid by an organisation to manage its activities.It identifies the range within which the subordinates can take decisions in an organisation.It authorizes the lower level management to resolve their issues and take decisions withoutconsulting the top level management repeatedly. The limits within which the decisions aremade are well defined. Business policy involves the acquirement of resources throughwhich the organisational goals can be achieved. Business policy analyses roles andresponsibilities of top level management and the decisions affecting the organisation in thelong-run. It also deals with the major issues that affect the success of the organisation. Features of business policy Following are the features of an effective business policy: Specific - Policy should be specific and identifiable. The implementation of policy is easier if it is precise. Clear - Policy should be clear and instantly recognizable. Usage o f j a r g o n s a n d connotations should be avoided to prevent any misinterpretation in the policy. Uniform Policy should be uniform and consistent. It should ensure uniformity of operationsat different levels in an organisation. Appropriate Policy should be appropriate and suitable to the organisational goal. It should be aimed at achieving the organisational objectives. Comprehensive Policy has a wide scope in an organisation. Hence, it sho u l d b e comprehensive. Flexible Policy should be flexible to ensure that it is followed in the routine scenario. Written form To ensure uniformity of application at all times, the policy should be inwriting. Stable Policy

serves as a guidance to manage day to day activities. Thus, it should bestable. Importance of Business Policies A company operates consistently, both internally and externally when the policies areestablished. Business policies should be set up before hiring the first employee in theorganisation. It deals with the constraints of real-life business.It is important to formulate policies to achieve the organisational objectives. The policiesare articulated by the management. Policies serve as a guidance to administer activities thatare repetitive in nature. It channels the thinking and action in decision making. It is amechanism adopted by the top management to ensure that the activities are performed inthe desired way. The complete process of management is organised by business policies. 4Q ) What, in brief, are the types of Strategic Alliances and the purpose of each? Supplement your answer with real life examples? Ans: Type of strategies1. Corporate level It consists of board of directors and CEO in framing strategies.The strategies are influential, pioneering and futuristic in nature. The strategies in corporate level are: Stability and expansion strategy Retrenchment strategy Corporate restructure Concept of synergy (Combination strategy) 2.Business level It deals with formulating the objectives and allocating appropriateresources to various functional areas in the organisation. The main features of business strategies are: Business stakeholders Achieving Cost Leadership and differentiation Risk factors External risk Internal risk 3.Tactical of Functional level It consists of strategies specific to functional areasand decisions at functional level are tactical The twotypes of functional level strategies are: Procuring and managing

Monitoring and directing 4.Operational level It refers to the implementation of strategic decisions andtranslation of strategic decisions into strategic actions at corporate level. The main aspects of operational level are: Achieving cost and operational efficiency Optimal utilisation of resources Productivity. 5Q ) Explain the concept, need for and importance of a Decision Support System? Ans: Computerized decision support systems became practical with the development of minicomputers, timeshare operating systems and distributed computing. The history of the implementation of such systems begins in the mid-1960s. In a technology field as diverse as DSS, chronicling history is neither neat nor linear. Different people perceive the field of Decision Support Systems from various vantage points and report different accounts of what happened and what was important (cf., Arnott & Pervan, 2005; Eom & Lee, 1990b; McCosh & CorreaPerez, 2006; Power, 2003; Power, 2004a; Silver, 1991). As technology evolved new computerized decision support applications were developed and studied. Researchers used multiple frameworks to help build and understand these systems. Today one can organize the history of DSS into the five broad DSS categories explained in Power (2001; 2002; 2004b), including: communicationsdriven, data-driven, document driven, knowledge-driven and model-driven decision support systems. This hypertext document is a starting point in explaining the origins of the various technology threads that are converging to provide integrated support for managers working alone, in teams and in organization hierarchies to manage organizations and make more rational decisions. History is both a guide to future activity in this field and a record of the ideas and actions of those who have helped advance our thinking and practice. Historical facts can be sorted out and better understood, but more information gathering is necessary. This web page is a starting point in collecting more first hand accounts and in building a more complete mosaic of what was occurring in universities, software companies and in organizations to build and use DSS. This document traces decision support applications and research studies related to model and data-oriented systems, management expert systems, multidimensional data analysis, query and reporting tools, online analytical processing (OLAP), Business Intelligence, group DSS, conferencing and groupware, document management, spatial DSS and Executive Information

Systems as the technologies emerge, converge and diverge. All of these technologies have been used to support decision making. A timeline of major historical milestones relevant to DSS is included in Appendix I. The study of decision support systems is an applied discipline that uses knowledge and especially theory from other disciplines. For this reason, many DSS research questions have been examined because they were of concern to people who were building and using specific DSS. Hence much of the broad DSS knowledge base provides generalizations and directions for building more effective DSS (cf., Baskerville & Myers, 2002; Keen, 1980). The next section describes the origins of the field of decision support systems. Section 3 discusses the decision support systems theory development that occurred in the late 1970s and early 1980s. Section 4 discusses important developments to communications-driven , data-driven, document driven, knowledge-driven and model-driven DSS (cf., Power, 2002). 6Q ) Write short notes on: a) Corporate social responsibility b) Business plan Ans: a) Corporate social responsibility (CSR, also called corporate conscience, corporate citizenship, social performance, orsustainable responsible business/ Responsible Business)[1] is a form of corporate selfregulation integrated into a business model. CSR policy functions as a built-in, self-regulating mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms. CSR is a process with the aim to embrace responsibility for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholdersand all other members of the public sphere who may also be considered as stakeholders. The term "corporate social responsibility" came into common use in the late 1960s and early 1970s after many multinational corporations formed the term stakeholder, meaning those on whom an organization's activities have an impact. It was used to describe corporate owners beyond shareholders as a result of an influential book by R. Edward Freeman, Strategic management: a stakeholder approach in 1984.[2] Proponents argue that corporations make more long term profits by operating with a perspective, while critics argue that CSR distracts from the economic role of businesses. Others argue CSR is merely window-dressing, or an attempt to pre-empt the role of governments as a watchdog over powerful multinational corporations. b) Business plan: 1 Use this template to write your own short business plan.

2 The text in RED is instructional. You should delete it before printing or sending your plan.

3 Any text in blue indicates a link to a webpage or document. Press control and click anywhere in the link to launch the page. You should delete these links before printing or sending your plan. 4 Keep your sentences short and concise. Use bulleted lists to highlight key points. 5 Break up your paragraphs with extra headings if necessary. 6 This template works best when used in Microsoft Word 97-2007 7 To get information about how to write your business plan, visit the Business Victoria Website at www.business.vic.gov.au.