1. Is the structure of an organization shaping the strategy of the firm? Why and Why not? Explain.

The organization is now in the position of having identified its strength and weaknesses: it is aware of the limiting factors which can be removed gradually, as well as those which will act as a constraint on its progress for some considerable time to come. It has defined its objectives-it now knows the financial results it must achieve over some suitable timespan. The trends in the environment have been assessed, and workable assumptions established on which the strategic thinking can be based. Some areas of opportunity will have been revealed by the corporate appraisal and the analysis of the competitive arena, and many major decisions may arise from the factors uncovered by this important step in the thinking process. But one starting point for the many strategic decisions is the profit target which the organization has set itself. Hoe it will meet this will be set out in the strategic thinking, whether this results in a written plan, which is the course I favour, or a shared understanding of a strategy expressed less formally. Let us assume that there is a need to put the plan in writing. There are three ways of obtaining this line, the forecast of the present position, but in the final event these will reconcile into one figure. The first line that can be sketched in is the sum of the profit targets which have been set individual operating units: this, of course, assumes that all units will meet, but not exceed, these targets. Profit targets should preferably be agreed in a participative way, and should be discussed in detail with the key managers involved before being firmed up. The second way, which perhaps is a variant of the first, is to make a simple model of the organizations profits under certain defined assumptions, and to use this forecast in the analysis . Thirdly, it is possible to obtain the operating plans from line management, add these all up, and use this as relevant data. If corporate targets have been well thought out, there is likely to be a gap between what is required and what is currently expected. This does not follow automatically, of course, and some organization may find that they can adequately meet their targets. When moving from the gap analysis to strategy, it should not be assumed that existing operations are an immutable element of the strategy. The other factors in the analysis might indicate a need for significant changes. Every organization has more than one path

along which it may travel. For example, the smallholder growing vegetables can increase sales in a variety of ways: Expanding extensively, buying the farm next door. Increasing production by intensive methods by applying more resources to the present operations, sowing a better type of seed, applying more fertiliser, irrigating and the like. Diversifying, by growing different types of crops from those at present under cultivation, or by adding a goat or a pig. Obtaining, a higher gross realization for the produce, by tackling the marketing side of the business in a more sophisticated way. Corporate strategy should be seen as an evaluation of the various options open to the company, and a selection of what appears to be the optimum course of action to take. In making this decision the top management should have regard to the organizations strengths and weaknesses, and the long-range trends that are forecast for the environment. This evaluation maybe extremely complex in, for example, the major multinational company. The example of the smallholder covered the broad types of choice open to an organization. Put another way, these are: Finding new markets for existing products. For example, attacking new segments of the market, selecting new channels of distribution, or expanding geographically. Marketing new products for existing markets. For example, another style of suit by a clothing company, a new flavor of toothpaste, doing own-label the same channels and can be sold by the usual sales force. Marketing new products for new markets. Moving into something completely new, such as the tobacco company which diversified into (among other things) potato crisps, and the soft drink firm which moved into tea and other lines. In looking at the tobacco example let us ignore the fact that most tobacco companies which went this route in the 1960s and 1970s have in the 1980s and 1990s divested such operations and gone back to the original core business. Improving the performance of existing products in existing markets. Tor example, putting more sales effort behind the products so that turnover is increased, or changing other marketing strategies (advertising, price, merchandising indeed any of the elements of marketing strategy to the same effect).

2. Planning involves selecting missions and objectives and the methods for attaining them. How will group effort be effective? How then will planning bridge the gap from where a firm the course of action the players will be making? Mission Statement are enduring statements of purpose that distinguish one business from other similar firms. A mission statement identifies the scope of a firms operations in product and market terms. It addresses the basic question that faces all strategies: What is our business? A clear mission statement describes the values and priorities of an organization. Developing a mission statement compels strategists to think about the nature and scope of present operations and to assess the potential attractiveness of future markets and activities. A mission statement broadly charts the future direction of an organization. An example of a mission statement is provided as follows for Microsoft. Objectives should be quantitative, measurable, realistic, understandable, challenging, hierarchical, obtainable, and congruent among organization units. Each objective should also be associated with timeline. Objectives are commonly stated in terms such as growth in assets, growth in sales, profitability, market share, degree and nature of diversification, degree and nature of vertical integration, earnings per share, and social responsibility. Clearly established objectives offer many benefits. They provide direction, allow synergy, aid in evaluation, establish priorities, reduce uncertainty, minimize conflicts, stimulate exertion, and aid in both the allocation of resources and the design of jobs. Clearly stated and communicated objectives are vital to success for many reasons. First, objectives help stakeholders understand their role in an organizations future. They also provide a basis for consistent decision making by mangers whose values and attitudes differ. By reaching a consensus on objectives during strategy-formulation activities, an organization can minimize potential conflicts later during implementation. Objectives set forth organizational priorities and stimulate exertion and accomplishment. They serve as standards by which individuals, groups, departments, divisions, and entire organizations can be evaluated. Objectives provide the basis for designing jobs and organizing activities to be performed in an organization. They also provide direction and allow for organization synergy. Although financial objectives are especially important in firms, oftentimes there is a trade-off between financial and strategic objectives such that crucial decisions have to made. For

example, a firm can do certain things to maximize short-term financial objectives that would harm long-term strategic objectives. To improve financial position in the short run through higher prices may, for example jeopardize long-term market share. The dangers associated with trading off long-term strategic objectives with near-term bottom-line performance are specially severe if competitors relentlessly pursue increased market share at the expense of short-term profitability. And there are other trade-offs between financial and strategic objectives, related to riskiness of actions, concern for business ethics, need to preserve the natural environment, and social responsibility issues. Both financial and strategic objectives should include both annual and long-term performance targets. Ultimately, the best way to sustain competitive advantage over the long run is to relentlessly pursue strategic objectives that strengthen a firms business position over rivals. Financial objectives can best be met by focusing first and foremost on achievement of strategic objectives that improve a firms competitiveness and market strength. Objective can be defined as specific results that an organization seeks to achieve in pursuing its basic mission. Objectives are essential for organizational success because they state direction; aid in evaluation; create synergy; reveal priorities; focus coordination; and provide a basis for effective planning, organizing, motivating, and controlling activities. Objectives should be challenging, measurable, consistent, reasonable, and clear. In a multidimensional firm, objectives should be established for the overall company and for each division. The only thing certain about the future of any organization is change, and planning is the essential bridge between the present and the future that increases the likelihood of achieving desired results. Planning is the process by which one determines whether to attempt a task, works out the most effective way of reaching desired objectives, and prepares to overcome unexpected difficulties with adequate resources. Planning is the start of the process by which an individual or business may turn empty dreams into achievements. Planning enables one to avoid the trap of working extremely hard but achieving little. Planning is an up-front investment in success. Planning helps a firm achieve maximum effect from a given effort. Planning enables a firm to take into account relevant factors and focus on the critical ones. Planning helps ensure that the firm can be prepared for all reasonable eventualities and for all changes that will be needed. Planning enables a firm to gather the resources needed and carry out tasks in the most efficient way possible. Planning enables a

firm to conserve its own resources, avoid wasting economical resources, make a fair profit, and be seen as an effective, useful firm. Planning enables a firm to identify precisely what is to achieved and to detail the who, what, when, where, why, and how needed to achieve desired objectives. Planning enables a firm to assess whether the effort, costs, and implications associated with achieving desired objectives are warranted. Planning is the cornerstone of effective strategy formulation. But even though it is considered the foundation of management, it is commonly the tasks that managers neglect most. Planning is essential for successful strategy implementation and strategy evaluation, largely because organizing, motivating, staffing, and controlling activities depend upon good planning. The process of planning must involve managers and employees throughout an organization. The time horizon for planning decreases from two to five years for top level to less than six months for lower-level managers. The important point is that all managers do planning and should involve subordinates in the process to facilitate employee understanding and commitment. Annual objectives are shot-term milestones that organizations must achieve to reach long-term objectives. Like long-term objectives, annual objectives should be measurable, quantitative, challenging, realistic, consistent, and prioritized. They should be established at the corporate, divisional, and functional levels in a large organization. Annual objectives should be stated in terms of management, marketing, finance/accounting, production/operations, research and development, and management information system(MIS) accomplishments. A set of annual objectives is needed for each long-term objective. Annual objectives are especially important in strategy implementation, whereas long-term objectives are particularly important in strategy formulation. Annual objectives represent the basis for allocating resources. Long-term objectives are needed at the corporate, divisional, and functional levels of an organization. They are an important measure of managerial performance. Many practitioners and academicians attribute a significant part of u. S. industrys competitive decline to the short-term, rather than long-term, strategy orientation of managers in the United States. A particular organization could tailor these guidelines to meet its own needs, but incentives should be attached to both long-term and annual objectives.

3. What do you think are the key traits of the companies that had prospered for 50 years or more. Describe and Explain. If an organization cannot sell the goods it produces at a realistic price it soon runs into trouble. It is its marketing ability which enables it to translate the needs and desires of its consumers into a formula which makes it possible for a profit to be earned. Failure in the marketing area may prevent the organization from succeeding, to its complete downfall. Marketing therefore should be approached in a strategic way. Somewhere in the organization, careful attention should be given to marketing strategy. In a modest-sized organization, the corporate strategy may have a high marketing content. In a large multinational, marketing strategy may not be a matter for the corporate level, but it certainly should be treated as important at the level of each business unit. The long survival of the business may depend on the aggressiveness with which the organization approaches the problem of bringing innovation to its markets. The organization that does not innovate is likely to be on that desolate path that leads to stagnation: it may travel on quite happily for many years, but unless it is constantly uncovering new ideas, new products, new concepts, and new approaches to all areas of marketing strategy, it carries with it the seeds of its own demise. In the modern, fast-changing world, continuous attention must be given to both the needs of customers and the actions of competitors. The first stage in preparing a strategic plan, be it short- or long-term, is the drawing together of the available and relevant market data, as a base on which to assess future patterns of development, and from which forecast of market size and growth can be made. Information comes from numerous sources, and there can be few organizations who know absolutely nothing about their markets. The heart of marketing strategy lies in the way the organization probes its current and potential markets, and works out profitable ways of meeting current market needs, and helps the market to identify needs that it did not know it had. The four Ps are: Price Product Place Promotion

Price means what it says. It is concerned with terms of trade, discounts and price promotions. One important aspect of long-range price strategies is that some organizations assume that their strategies should take no account of either cost or price rises, as these cancel each other out. This, of course, is a gross fallacy, and those making this assumption have their heads so far buried in the sand that they will never be able to give their organization that quality of vision which was, presumably, the reason they were put on the payroll. In some countries price strategy is affected by government policies, and any proposed price increases must take into account, as well as the effects on the market itself. Regardless of government interest in prices, no company will adjust its prices for every movement in costs: there is tactical position to be decided for every price rise. Price may, of course, be an aggressive element of marketing strategy. It may be used to change the pattern of order purchase size, thus reducing unit sales, order processing and physical distribution costs. It may be used to increase the volume of sales: And of course different price strategies may be applied to different geographical areas, or to the each segment of a particular market. So price must not be neglected in an organizations market planning, as it is by no means a passive element which automatically compensates for inflationary tendencies. Product is the next of the four Ps. This element covers the intangible aspects of a product as well as its physical characteristics. The tangible aspects include many different things. Perhaps the most obvious is the shape and composition of the product itself, the way in which it basically sets out to give satisfaction to its consumers. This would cover of a convenience food, the formulation of a toilet preparation, or the curative benefit of a pharmaceutical. Closely allied to the characteristics are the packaging and the size of unit offered for sale. Packaging is, of course of the utmost importance in the marketing of many items: with an industrial product the main problem might be to package in a way that gives the most convenience to the user: with a grocery product the shape and appeal of the package, which may also be a vehicle to advertise special offer and promotions may be the deciding element in the attraction of a purchaser. Packaging as a means of preserving goods from damage and storing them until sold is often second in importance to packaging as an active element of selling. There is also a cost aspect attached to each package or size of unit marketed: each additional item brings extra charges for financing inventories and storage, as well as possibly adding to direct production costs. The reduction of variety can often be an

important method of planning improved profits. From packaging, it is natural to turn ones thoughts to branding. This element covers such items as the marketing of brands to appeal to the various segments of the market, policy for the production of own label products for others, and whether the organization brings out families of brands, or creates a new brand for each product. The intangible aspects of product strategy cover those items which the organization offers to purchaser as an inducement to buy. For example, the terms of credit it is prepared to give, any particular guarantees attached to the product, a special delivery service, or free after sales servicing of appliances. With electrical goods, or motor cars, the widespread availability of service and repair shops might be a highly attractive intangible to the prospective customer. Place is a term that calls for a little stretching of the imagination, and would be better translated as distribution. The remaining of our four Ps is Promotion. This covers numerous activities in addition to the mass advertising that immediately springs to mind. Under this heading I would also include merchandising, selling, sales promotion and point of sale activities, sampling and general product public relations. There are numerous variables to choose from, both in relation to the types of promotion used, the weights assigned to each, and the way in which the product image is put across. Innovation has been mentioned elsewhere. Although innovation is by no means restricted to marketing applications, it is convenient to round off this search-based ideas on how to innovate successfully. Until recently may writes on innovation have concentrated on creativity rather than on the process itself. Management consultants Harbridge House Inc., now owned by Coopers & Lybrand, researched the common factors identified by successful innovating managers in a number of US organizations. The management practices, or competitors, applied by these managers were listed, from which occurred in all successful situations. Further work was then undertaken to validate the conclusions. The model accepts that creativity is important, but argues that there is much to do to change creativity to innovation. The other three segments are a form of transformational leadership: developing a vision through communication, involvement, reinforcement, support and influence: managing the process by providing direction and control to the project. Successful innovation related to the ability of the innovator to steer the project through the organization.

4. Describe the process of strategic management. Describe it in terms of strategy as a plan, a play, a pattern, a position and as a perspective in the global arena, a shifting in the nature of competition, that would need s course of action to make. Strategic management is concerned with the definition of the major goals and objectives for an organization, and the design of the functional policies and plans and the organizational structure and systems to achieve those goals and objectives, all in response to changing environmental conditions, institutional resources, and individual motives and values. Strategy may be considered either as the present product-market-process position of the company, or as the future growth plans for the firm, but the most meaningful definition is probably the method of competition to be followed by the business. There are methods of competition (alternative strategies) that are possible within each industry, and the function of strategic management is to first select the method (strategy formulation) through explicit statements of the corporate objectives, policies, programs, and plans, and through consistent design of the organization structure and systems. Strategy formulation and implementation are both required in strategic management; the first portion, formulation, can be presented in outline format as shown on the top of the next page. The selected strategy, or method of competition chosen for the business, is then expressed through explicit statement about the goals, policies, programs, and actions for each of the functional areas of marketing management, market research, production management, financial management, product development, information services, and personnel services. These functional objectives, policies, programs, and actions define the tasks or jobs that are essential for strategic success, and the organizational structure and systems are then designed to coordinate and assist in the performance of these tasks. Strategic management, then consists of the simultaneous and continual formulation and implementation of the method of competition for a business firm; it coordinates the marketing, production, finance, and product development functions of the company, and directs this coordinated effort toward the achievement of specific goals and objectives, the establishment of a defined product-marketprocess position, and the development of a planned program of growth and change. Strategic management, in short, plans the long-term competitive posture of the firm, and designs the general character of the organization. It answers two essential questions: what sort of business are we in? and What sort of company should we have?

The second step in strategic management is to consider the values and attitudes of the managerial personnel whose participation and cooperation is essential for the success of the firm. Individuals make up organizations, and each individual has asset of ambitions, beliefs, and moral standards that is at least partially unique; it is important for the general to understand these personal aspirations and individual attitudes toward risk, reward, and social responsibility by the members of the firm since this understanding provides another version of the purpose of the organization, which can then be compared to the existing mission or charter. Discrepancies between the mission or charter of the firm and values and attitudes of the executives should be resolved by the general manager as a condition for effective strategic planning since there needs to be a considerable area of agreement upon the purpose of the organization for effective operations. The last of the preliminary steps in strategy formulation is the review of the past performance and the present position of the firm, and the comparison of this performance and position with the mission or charter of the organization and the ambitions and goals of the management. Discrepancies, of course, would indicate the need for change; this change could be either in the purpose of the organization and the goals of the executives, or in the strategy, or method of competition of the business, which eventually would lead to a change in the performance and position of the firm indicates how well the company is doing relative to the mission and goals established for it; this examination should consider all the major functional areas: 1. Marketing. The examination of the performance and position of the marketing function of the firm should consider the market the market share and the industry position of the major products of the company, and the recent trends in these standings. 2. Operations. The examination of the performance and position of the production function of the firm should consider the cost per unit, relative to estimated industry costs, and the productive capacity in units for the major products of the company, and the recent trends in these figures. 3. Development. The examination of the performance and position of the research and development function of the firm should consider the percentage of successful products, together with some measure of that success and some estimate of the costs of that development, and the recent trends in these statistics.

4. Finance. The financial position summarizes, to a very explicit quantitative terms, of the performance of the marketing, production, and development functions of the firm, also facilitates the comparison, in every explicit quantitative terms, of the performance and position of the company with the mission of the organization and the ambitions of the members. The major environmental areas: 1. Economic assumptions. The economic characteristics and trends should be considered would include the growth of the national income, the state of the business cycle, and the rate of monetary inflation for the general economy, and the availability of raw materials, trained employees, and debt or equity capital for the specific industry. 2. Technological assumptions. The technical characteristics and trends that should be examined would include the development of new products, the availability new materials, and the design of new processes, both within the given industry and within potentially competitive industries. 3. Social assumptions. The social factors that should be reviewed would include demographic changes in such areas as population growth, educational level, and income distribution, and public concerns, resulting in informal requests to management, on such topics as environmental deterioration, consumer protection, and minority employment. 4. Political assumptions. The political factors that should be surveyed would include changing patterns in urban services, state programs, and federal expenditures, and the public concerns that have led to governmental actions and formal requirements upon management. 5. Competitive assumptions. The competitive characteristics and trends that should be studied would include both new competitors and new strategies or new programs by existing competitors; the ease of entry within an industry, and the ease of changing established industry practices, should be reviewed.

6. What do you think is the best policy? Why? Explain. Firstly, as far as possible it should be an objective and analytical process. This is why I believe there are sever limitations to the popular SWOT approach, since it can only extract from managers what they already know, and often this is a biased perception. So things that are extremely important may be ignored, and others given an optimistic or pessimistic slant, depending on news that has just come through the door. So appraisal should undertaken in a way hat its conclusions are drawn from an objective analysis of the organization. At this point the opinions and insight of manager may be make a valuable contribution to understanding, provided they are not allowed to ignore critical facts that come out of the appraisal. Secondly it is necessary to think through the purpose of the appraisal: The most common purpose is as one of the steps towards developing strategies. In an ailing company, the main purpose might be the development of a survival strategy. In an organization which has developed an appropriate strategy, the main need might be to ensure that everything the organization does is helping it to achieve this strategy. In an acquisition situation the appraisal might be what is known as due diligence, where the aims are to ensure that you understand what you are buying, and know how it will fit with your own organizations strategy. There are different ways of looking at an organization, and we may need to take more than one viewpoint. Each reveals a little more of the truth that we are struggling to uncover. The top triangle is an essential step, and as it suggests is an objective analysis of the organizations performance. It rests on a rectangle which represents a functional view of the organization, for example manufacturing, logistics information systems, and HRM. The bars across this box show various cross-organizational ways of thinking. We may want to think about technologies, and where and how they are used across various units of the organization. The line of thinking used in Total Management, or business process re-engineering. It may be that capabilities may be appropriate. Or

we may want to look at competencies, which are groupings of skills and technologies. Although distinguished in the literature, competencies and capabilities are two sides of the same coin, and will be treated together. It is worth remembering that some of the things uncovered in an appraisal are a form of hygiene factor: failure to them well may cause the organization to fail, but doing them right will not make the organization successful. Others are definitely success factors: without them the organization may be average or a failure, but with them it has a chance of gaining competitive advantage. What is relevant to consider in the appraisal will vary with the purpose. For example in an appraisal of your own organization existing contracts with suppliers and service contracts of directors will not normally be of great relevance. In a due diligence situation they may be vital pieces of information, as they may prevent your organization from implementing the strategy that lay behind the acquisition, may delay implementation, or may increase the costs. Common sense and good business judgement are important in determining relevance, but remember that all humans are affected by the boundaries of their perception, and a real danger is to ignore an area because it is not important in this business. It is better to err on the side of doing analysis which you later do not use, than to ignore something which is critical. Relatively is a different but important concept. Obviously you need the basic facts, but even a study of trends may not tell you whether what you have observed is a strength or a weakness. The analysis may be more meaningful if it is looked at relative to something else: Competitors: you may think, for example, that your costs are low or your manufacturing methods are up to date, but without thinking about your position relative to competitors it may be difficult to evaluate whether you are ahead or behind. Customers: you may be very pleased with the level of customer service you provide, or the quality of your products, but if you cannot relate this to what the customer expects and requires, you may be in a much weaker position than you believe.

External trends: your competitive position in the home market may appear to be healthy, but your industry is steadily becoming global. Judging a global market by purely domestic criteria may mean that you are missing one of the most vital concerns for your organization. Vision: if your organization has a clear vision and strategy, your findings on support activities such as HR policies should be relative to this. Similarly, if the results of the appraisal and industry analysis lead to the creation of a new vision and strategies, it may be desirable to return to your findings to check that they support the new direction of the organization. Modern organizations are often very large and complex, so the task of appraisal has to match this complexity. Although in a single industry company it might be possible to work through and apply almost every page of the detail in these notes in one single report, a large organization such as a General Electric or Unilever needs to attune the appraisal to what is relevant at each level. The top management of a company like United Technologies would have a very great interest in the overall financial aspects of the group, where the profits, cash generation and growth are coming from in terms of SBUs and geographical areas, would need a way, such as portfolio analysis, of relating all the SBUs to each other, and might well find it essential to have an overall appraisal of the technological capabilities it possesses. A next stage is the identification of the profit contribution of each area. What percentage of profits comes from where? The study should be made first by profit centres and then broken down by product. Of course, many companies will have these data as part of the normal management information system-although the remarks later about the basis of cost allocation may be relevant. Having identified the profit strength of each product, it is wise to study past trends, external data, and internal opinions about the future prospects of each product. If, for example, the major contributors show signs of slipping, this should be known. By this stage the company should have an opinions of its present and future bread-winners. It is worthwhile classifying products, both in relation to their current importance.

5. Why do you think strategic plans fail? Discuss. The reasons why strategic planning fails and the rate of failure should not be a surprise to anyone since it would perpetuate another fallacy of planning. The Harvard business Review puts the ROI of traditional planning at 34% a less. In fact according to several surveys of top executives only 19% of strategic plan achieve their objectives. Perhaps another not so surprising data point is that among those some executives, why 25% of them are even motivated by the plans they create. Why then do so many organization devote so much time and energy to the annual ritual of developing or updating their strategic plans if they are doomed to failure from the start. Just this of all of the smart, well-educated, experienced managers and executives devoting so much of their organization limited resources on an activity with such a poor track record of producing results? 85% percent of management teams spend less than one-hour a month or strategy issues Many organization dont have a consistent way to even describe their strategy other than in a large strategic planning binder. Only 27% of a typical companys employees have access to its strategic plan.

It is ashame our collective investment over the years in it governance and control framework hasnt advanced us further than this. The cause behind strategic planning failures are well understand and described in detail in the references offered here. I suspect anyone that has been forced to endure a strategic planning cycle instinctively knows many of the causes beginning with the process being often very painful to sit through. Planning can be an exhaust. Strategic plans and operational plans must allow for the curvaceousness of how event unfold and the fluidity with which situation change. Yes you can still do integrated planning, and poor tons of time into making smart goals, but it is more important that you build into your plans see form of an options approach to allow for creating and maintaining options for uncertainty and for possible changes. What strategy plans needs is leadership from the key people, which may be the corporate leaders, meddle management or even employees at all levels. Is imperative for strategy Planers, to pay

particular attention to those variables, because without it, you are planning to use not to make it happen. Finally, strategy may come from any corporate leader and that is one of the reasons why none of these ingredients is present, causing strategy to fails. Effective strategic planning should begin at the corporate or enterprise level. Each lower-level organization should then create their strategy sot that it directly supports the higher level strategic objectives.