Q.No. 1.: What is strategy? Explain some of the major reasons for lack of strategic management in some companies?

Solution: STRATEGY: A method or plan 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 general ship or leading an army. See also tactics.

The major reasons for lack of strategic management in some companies:

NOT ENOUGH TIME: Day -to-day operating problems take up the time necessary for long-term planning. Its relatively easy to justify avoiding strategic planning on the basis o f day-to-day crisis management. Some will ask, How can I be expected to do strategic planning when I dont know if Im go be in business or involved in the organization next week?

UNFAMILIARITY WITH STRATEGIC PLANNING: The small-business or small organization CEO may be aware of strategic planning or view it as irrelevant. Strategic management through Strategic planning may be viewed as a straitjacket that limits flexibility.

LACK OF SKILLS: Manager of small organizations or small-business managers often lack the skills necessary to perform strategic management to begin strategic planning and dont have or want to spend the money necessary to bring in consultants that do. Future uncertainty may be used to justify a lack of planning. One organizations CEO, as well as, an entrepreneur admits, Deep down, I know I should plan, but I dont know what to do, Im the leader, but I dont know how to lead the planning process.

LACK OF TRUST AND OPENESS IS PERHAPS THE REAL KEY: Many small organization leaders or small-business owner-managers are very sensitive about the organizations or businesss key information and unwilling to share the strategic planning with employees or outsiders. For this reason also, board of directors often are composed only of close friends and relatives of the organizations leader or of the owner-manager--people unlikely to provide an objective viewpoint or professional advice.

CONCLUSION: Pay attention to Motivation and Personal Ownership, Communications, No Plan behind the Idea, Passive Management, and Leadership, and you'll be ahead of the strategic planning game. These observations and insights can help you improve your success rate with implementing strategic plans, so it doesn't feel like doing the splits over a case of dynamite. If you have had "great plans" fail -- I've lost personal count! -- take what we have learned here and embrace a new plan for those "high-level ideas." Let's also learn from Napoleon Hill: "The majority of men meet with failure because of their lack of persistence in creating new plans to take the place of those which fail." Braced with this knowledge, you'll do clearly better this time, and without need of bullets or amphetamines! Q.No. 2.: Explain the following: (a) Core competence (b) Value chain analysis Solution: CORE COMPETENCE: A unique ability that a company acquires from its founders or develops and that cannot be easily imitated. Core competencies are what give a company one or more competitive advantages, in creating and delivering value to its customers in its chosen field.

Core competencies describe the behaviours that are key to the success of an organization. In a sense, core competencies define the skills and abilities that all employees must demonstrate in order to drive business results. Core competencies are directly aligned with and support the primary goals and strategies of the organization. The process of identifying core competencies starts with the specification of primary goals and strategies. Questions might include: What does the company hope to achieve? What are the critical business results? What are the primary drivers of success? Where is the company headed? What is the 1-year/3-year/5-year plan? A corporations culture, mission, vision, and values should also be reflected in the organizations core competencies. Before we create customized core competencies for a client organization, we meet with corporate leaders and strategists to fully understand the companys goals, mission, values and strategies. After these are fully defined and understood, we work directly with corporate leadership to identify and define the critical competencies that drive the targeted business results. The majority of competency models include 5-10 core competencies that all employees must demonstrate for the company to achieve strategic goals and objectives.

VALUE CHAIN ANALYSIS: Value Chain Analysis is a useful tool for working out how you can create the greatest possible value for your customers. In business, we're paid to take raw inputs, and to "add value" to them by turning them into something of worth to other people. This is easy to see in manufacturing, where the manufacturer "adds value" by taking a raw material of little use to the enduser (for example, wood pulp) and converting it into something that people are prepared to pay money for (e.g. paper). But this idea is just as important in service industries, where people use inputs of time, knowledge, equipment and systems to create services of real value to the person being served the customer. And remember that your customers aren't necessarily outside your organization: they can be your bosses, your co-workers, or the people who depend on you for what you do. Now, this is really important: In most cases, the more value you create, the more people will be prepared to pay a good price for your product or service, and the more they will they keep on buying from you. On a personal level, if you add a lot of value to your team, you will excel in what you do. You should then expect to be rewarded in line with your contribution. So how do you find out where you, your team or your company can create value? This is where the "Value Chain Analysis" tool is useful. Value Chain Analysis helps you identify the ways in which you create value for your customers, and then helps you think through how you can maximize this value: whether through superb products, great services, or jobs well done.

Q.No. 3.: Describe in brief the following environmental factors which a business strategist considers: (a) Political factors (b) Technology Solution: POLITICAL FACTORS: the political environment can affect a business either positively, or negatively, depending on the prevailing situation in a country. It mainly forms the external factors which are part of the macro-environment, control of which is beyond the ability of human beings. These factors touch on the way politics are conducted in a country, which directly reflects on what is happening within the government itself. This means that a democratic country will accord freedom to its people to vote for a government which has their interests at heart, and thus business will thrive owing to the good policies the government implements.

On the other hand, a dictatorial government will not earn the respect of its citizens - leading to economic as well as political instability and uncertainty. Even though such a government will

eventually go, businesses suffer a lot during the government's tenure, since they are not sure of their future. This underlines the importance of a democratic government to a country and to business.

Needless to say, once a country is stable, more investment opportunities will be realised, thus attracting more and more investors. This will reflect positively and directly on local businesses, as citizens will be able to have full confidence in them.

Business success depends on politics to a high degree, and in many ways. Politicians are usually the people controlling the operations of a government, and will decide which countries to trade with, as well as on setting the trading conditions. This means that, if a certain business or its owners are not on good terms with the politicians, then they will suffer.

Furthermore, the rules that govern and regulate the manner in which trade is conducted are enacted by the politicians - thus good relations are needed between stakeholders in the business sector and politicians, to facilitate success.

TECHNOLOGY: Technology plays a key role in today's business environment. Many companies greatly rely on computers and software to provide accurate information to effectively manage their business. It is becoming increasingly necessary for all businesses to incorporate information technology solutions to operate successfully. One way that many corporations have adopted information technology on a large scale is by installing Enterprise Resource Planning (ERP) systems to accomplish their business transaction and data processing needs. The company named SAP Aktiengesellschaft (commonly known as SAP AG in the business press) is currently the world market and technology leader in providing ERP systems.

Importance: Small business owners can use technology to reduce business costs. Business technology helps automate back office functions, such as record keeping, accounting and payroll. Business owners can also use technology to create secure environments for maintaining sensitive business or consumer information. Many types of business technology or software programs are user-friendly. This allows business owners with a minor background in information technology to use computer hardware and software.

Features: Business technology can help small businesses improve their communication processes. Emails, texting, websites and personal digital products applications, known as apps," can help

companies improve communication with consumers. Using several types of information technology communication methods allow companies to saturate the economic market with their message. Companies may also receive more consumer feedback through these electronic communication methods. These methods also allow companies to reach consumers through mobile devices in a realtime format.

Function: Small businesses can increase their employees' productivity through the use of technology. Computer programs and business software usually allow employees to process more information than manual methods. Business owners can also implement business technology to reduce the amount of human labor in business functions. This allows small businesses to avoid paying labor costs along with employee benefits. Business owners may also choose to expand operations using technology rather than employees if the technology will provide better production output.

Potential: Technology allows small businesses to reach new economic markets. Rather than just selling consumer goods or services in the local market, small businesses can reach regional, national and international markets. Retail websites are the most common way small businesses sell products in several different economic markets. Websites represent a low-cost option that consumers can access 24/7 when needing to purchase goods or services. Small business owners can also use Internet advertising to reach new markets and customers through carefully placed web banners or ads.

Considerations: Business technology allows companies to outsource business function to other businesses in the national and international business environment. Outsourcing can help companys lower costs and focus on completing the business function they do best. Technical support and customer service are two common function companies outsource. Small business owners may consider outsourcing function if they do not have the proper facilities or available manpower. Technology allows businesses to outsource function to the cheapest areas possible, including foreign countries.

Q.No. 4.: Write a brief note on Turnaround strategy. Solution: TURNAROUND STRATEGY The overall goal of turnaround strategy is to return an underperforming or distressed company to normal in terms of acceptable levels of profitability, solvency, liquidity and cash flow.

Turnaround strategy is described in terms of how the turnaround strategy components of managing, stabilising, funding and fixing an underperforming or distressed company are applied over the natural stages of a turnaround.

To achieve its objectives, turnaround strategy must reverse causes of distress, resolve the financial crisis, achieve a rapid improvement in financial performance, regain stakeholder support, and overcome internal constraints and unfavourable industry characteristics.

Turnaround strategy components The components of turnaround strategy are: Managing the turnaround in terms of turnaround leadership, stakeholder management, and turnaround project management. Stabilising the distressed company by ensuring the short-term future of the business through cash management, demonstrating control, re-introducing predictability and ensuring legal and fiduciary compliance. Funding and recapitalising the distressed business. Fixing the distressed company in strategic, organisational and operational terms.

Turnaround stages Turnaround stages comprise of the following: Recognising the need for a turnaround. Turnaround situation assessment.

Emergency management Turnaround plan refinement Turnaround restructuring Turnaround recovery

Q.No. 5.: Define the term strategic alliance. What are its characteristics and objectives? Solution: STRATEGIC ALLIANCE Agreement for cooperation among two or more independent firms to work together toward common objectives. Unlike in a joint venture, firms in a strategic alliance do not form a new entity to further their aims but collaborate while remaining apart and distinct.

There are five general criteria that differentiate strategic alliances from conventional alliances. An alliance meeting any one of these criteria is strategic and should be managed accordingly.

1. Critical to the success of a core business goal or objective. 2. Critical to the development or maintenance of a core competency or other source of competitive advantage. 3. Blocks a competitive threat.

4. Creates or maintains strategic choices for the firm. 5. Mitigates a significant risk to the business.

The essential issue when developing a strategic alliance is to understand which of these criteria the other party views as strategic. If either partner misunderstands the others expectation of the alliance, it is likely to fall apart. For example, if one partner believes the other is looking for revenue generation to achieve a core business goal, when in reality the objective is to keep a strategic option open, the alliance is not likely to survive.

Strategic alliances have some characteristics: 1. Two or more organizations (business units or companies) make an agreement to achieve objectives of a common interest considered important, while remaining independent with respect to the alliance. 2. The partners share both the advantages and control of the management of the alliance for its entire duration. 3. The partners contribute, using their own resources and capabilities, to the development of one or more areas of the alliance (important for them). This could be technology, marketing, production, R&D or other areas.

Objectives of strategic alliance: 1. Organic growth alone is insufficient for meeting most organizations required rate of growth. 2. Speed to market is essential, and partnerships greatly improve it. 3. Complexity is increasing, and no single organization has the required total expertise to best serve the customer. 4. Partnerships can defray rising research and development costs. 5. Alliances facilitate access to global markets.

Q.No. 6. : Write short notes on the following: a) Competitive advantage b) Porters Competitive threat model Solution:

COMPETITVE ADVANTAGE: A superiority gained by an organization when it can provide the same value as its competitors but at a lower price, or can charge higher prices by providing greater value through differentiation. Competitive advantage results from matching core competencies to the opportunities. A competitive advantage is an advantage gained over competitors by offering customers greater value, either through lower prices or by providing additional benefits and service that justify similar, or possibly higher, prices. For growers and producers involved in niche marketing, finding and nurturing a competitive advantage can mean increased profit and a venture that is sustainable and successful over the long term. This fact sheet looks at what defines competitive advantage and discusses strategies to consider when building a competitive advantage, as well as ways to assess the competitive advantage of a venture. Competitive Advantage Evaluation Process When a business is just starting out, it may be worthwhile to perform a comprehensive evaluation of the business goals and how it might fit into the market. Evaluate Resources: The basis for a competitive advantage often lies in the resources and abilities that are already available, even though the resources may not initially be recognized. Begin by taking a critical look at the existing resources and product/service offerings. What does the venture have that could be used as an advantage? Reading through the potential options for competitive advantage above, which of these resources are already available and which does the venture need to obtain in order to focus one or more of the strategies? Clarify Goals: Has a clear idea of what the venture seeks to accomplish been established? Businesses with specific and achievable goals tend to have better and more consistent growth. Challenging, but realistic goals should be written out to help clarify what the business will do for itself and its customers in the future. These goals will become benchmarks for success and will help maintain focus among all involved parties. Define Customers: Determining the products and services customers want and cannot get from the competition is a first step toward defining the business potential customers. Once the needs and wants of the potential customers have been established, the characteristics of those customers can be examined in an effort to identify commonalities. For instance, the development of salad mixes came from the realization that for convenience, some consumers needed a pre-washed and mixed salad alternative, rather than bunches of greens that needed to rinsed and spin-dried.

Examine Competitors: With an understanding of what customers want and an idea of how this can be provided, it is important to take a look at other ventures that might be targeting the same market. First, look at the direct competition. For example, a venture selling fresh produce in a farmers market would have direct competition from other vendors at the market, while the indirect competitor would be grocery stores in the same area. Once the competition has been identified, compare the strengths and weaknesses of the competition to the strengths and weaknesses of the venture. This will provide more insight as to where the ventures competitive advantage lies.

PORTERS COMPETITIVE THREAT MODEL

The competitive rivalry within the industry: The competition between firms determines the attractiveness of a sector. Companies are struggling to maintain their power. The competition changes based on sector development, diversity and the existence of barriers to enter. In addition it is an analysis of the number of competitors, products, brands, strengths and weaknesses, strategies, market shares. The threat of new entrants: It is in a companys interest to create barriers to prevent its competitors to enter to market. They are either new companies, or companies which intend to diversify. This barriers can be legal (patent regulations), or industrial (products or single brands).The arrival of new entrants also depends on the size of the market (economy of scale), the reputation of a company already installed, the cost of entry, access to raw materials, technical standards, cultural barriers.

The threat of substitute products: The substitute products can be considered as an alternative compared to supply on the market. These products are due to changes in the state of technology or to the innovation. The companies see their products be replaced by different products. These products often have a better price/quality report and come from sectors with higher profits. These substitute products can be dangerous and the company should anticipate to cope with this threat. The bargaining power of suppliers: The bargaining power of suppliers is very important in a market. Powerful suppliers can impose their conditions in terms of price, quality and quantity. On the other hand if there are a lot of suppliers their influence is weaker. One has to analyze the number of realized orders, the cost of changing the supplier, the presence of raw materials. The bargaining power of customers: If the bargaining power of customers is high, they influence the profitability of the market by imposing their requirements in terms of price, service, quality,. Choosing clients is crucial because a firm should avoid to be in a situation of dependence. The level of concentration of customers gives them more or less power. Generally their bargaining power tends to be inversely proportional to that of the suppliers.