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D035 Rahul Panigrahi D045 Chhavi Saluja D048 Gaurav Singh D058
TABLE OF CONTENTS
1. Introduction
2. Directions of Strategy Development 3. Tows Matrix 4. Methods of strategy development 5. Strategic Alliances 6. Tesco Case
Whats my motive?
Environment Based
Fitting new strategies to a changing business environment
Capability Based
Expectations Based
Stretching and exploiting resources and competences of an organization Meeting expectations created by the cultural and political context
Strategy Development
Existing Products New
Existing
Protect/Build
Product Development
Ansoffs Matrix
Markets
New
Market Development
Diversification
Roseville Enterprises
Workshop for the blind funded by the Leeds city council, UK
80% work came from the council for renewing windows and
doors. The contract was to expire in 2008 To ensure employability of the staff the range of activities were broadened:
Computer refurbishing center Pine furniture Laundry hire and cleaning services
current products May require reshaping by downsizing or withdrawal from some activities:
distribution system. This initial entry developed substantial business and was fairly successful, until foreign firms ran into trouble around the end of the Second World War. In order to protect the domestic firms of Japan, their government implemented restrictions on the entry of foreign firms by limiting direct investments and imposing tariffs and quotas on imports. Moreover, in 1960 the Japanese government specifically told Kodak that they would have operate through a single importer, which forced Kodak to stop supplying wholesalers directly. Lagged behind Fujifilm till the 90s in which it sought aid from WTO
Source: The Kodak-Fujifilm Trade Dispute, Graduate school of business, Stanford University
Prioritization at Sony
Restructuring efforts at SONY: Headcount reduction programs Initiatives to advance rationalization of manufacturing operations Shifting and aggregating manufacturing to low-cost areas, and utilizing the services of third-party original equipment and design manufacturers. Sony also ceased production at two overseas manufacturing sites, including Sony Dax Technology Center in France, which manufactures tape and other recording media, and terminated LCD rear-projection television operations Total restructuring charges of 37,421 million yen, 45,635 million yen and 61,913 million yen in 2007,08 and 09
Source: Wikinvest, Sony Financial Reports
quarter in 2012 Boosted development of web based products, operating system, desktop products, hardware and services Increase of 62% market spend in 2012 Google goggles, Google cars, Google Me!, Super broadband
Market Penetration
Koninklijke Hoogovens in 1999 Global provider of aluminum and steel solutions Corus Colors is an international business with strip products division manufacturing pre-finished steel CES , a key market including hospitals and fodd processing industry Introduction of brand Assure which provided laminate having anti-bacterial additive Adoption of premium pricing policy by differentiating into a niche market
Became Webs largest and best online book store in less than a
year State of the art recommendation centre and online promotion Profits started to come only in 2002 Currently holds 75% of the market share in online e-book market
phones that dominated the market Viewed as technologically superior Launch of Iphone in 2007 by Apple eroded their market share Apple grew from a niche market to a larger demography Launch of Android OS completely changed the game
Product Development
Delivering modified or new products to existing markets Can be achieved in 2 ways
Product Development
Delivering modified or new products to existing markets Can be achieved in 2 ways
Lacked innovation over last few years Lost market share Acquired by Google for $12 bn
Market Development
Existing products are offered in new markets When ? no further opportunities in current market Considerations : Exploiting other market segments
New Uses of current products Eg. Camera Phones Increasing Geographical Spread Expanding nationally and internationally
Diversification
Diversification is defined as a strategy that takes an
Haircare Pantene, Head & Shoulders, Laundry Daz, Ariel, Fairy, Bounce Beauty Oil of Olay, Max Factor Virgin Travel (& Virgin Holidays), Mobile phones Virgin Retail (Music & Entertainment) Virgin Investments, Virgin Communications
Walt Disney
Introduction-TOWS matrix
TOWS analysis is basically putting SWOT analysis into
action. A complementary way of generating options from knowledge of the organization position. TOWS Analysis is an effective way of combining A) Internal strengths with external opportunities and threats, and B) Internal weaknesses with external opportunities and threats to develop a strategy. Difference between TOWS and SWOT is that TOWS emphasizes the external environment whilst SWOT emphasizes the internal environment
TOWS Matrix
Internal Strengths(S) 1. 2. 3. External Opportunities (O) 1. 2. 3. Internal Weaknesses (W) 1. 2. 3. W-O
S-O
"Maxi-Maxi"
Strategy Strategies that use strengths to maximize opportunities. S-T
"Mini-Maxi Strategy
Strategies that minimize weaknesses by taking advantage of opportunities.
W-T
"Maxi-Mini"
Strategy Strategies that use strengths to minimize threats.
"Mini-Mini Strategy
Strategies that minimize weaknesses and avoid threats.
S-O
1. Develop & Produce Multiproduct Line with Many Options, in Different Prices (Dasher, Scirocco, Rabbit, Audi Line) (O1S1S2) Build Assembly Plant Using R & D, Engineering, and Production /Automation Experience (O2S1S3) 1.
W-O
Develop Compatible Models for Different Price Levels (Ranging from Rabbit to Audi Line) (O1W1) To Cope with Rising Costs in Germany, Build Plant in U.S., Hiring U.S. Managers with Experience in Dealing with U.S. Labor Unions (O2W2W3)
2.
2.
External Threats: 1. Exchange Rate: Devaluation of Dollar 2. Competition from Japanese and US automakers 3. Fuel Shortage and Price
S-T
1. Reduce Effect of Exchange Rate by Building a Plant in the U.S. (T1T2S1S3) Meet Competition with Advanced Design Technology - e.g. Rabbit (T2T3S1S2) Improve Fuel Consumption Through Fuel Injection and Develop Fuel EfficientDiesel Engines (T3S1) 1.
W-T
Reduce Threat of Competition by Developing Flexible Product Line (T2W1)
2.
3.
Options not exercised by VW 1. Withdraw From U.S. Market 2. Engage in Joint Operation
capabilities
Revenue
Headcount
PR
Quality
Investments not necessary American Express, 3M enhance customer value, recapture lost customers Cisco, Centrica dynamic product portfolio management T-Mobile- value-based and bundled pricing
Cost Efficiency
Unalike Company Culture Lost Time Never Found Again Merge Unequals, Not Equals
Chinese Company Huiyuan Juice, which in turn pave way for PepsiCos Topicana to gain the
Global Reach
Strategic Alliances
Two or more organizations share resources and activities to
pursue a strategy
Alliances vary in complexity from simple two-partner
alliances co-producing a product to multiple partners providing complex products and solutions
partnerships with either competitors or providers of complimentary products Co-specialization: Allowing each partner to concentrate on activities that best match their capabilities Learning from partners: developing competencies that may be more widely exploited elsewhere
UK anti-drug strategy
In mid 2000s Britain was facing Drug misuse problem Government wanted to protect the communities from drug-
related antisocial problems Youth education on drug misuse was needed Treatment for people with drug abuse had a growing importance
UK anti-drug strategy
Different agencies were involved in different activities
agencies to tackle the problem At the central government level a cabinet sub-committee was established At local levels too Drug Action Teams were established These teams had people from all agencies working together to tackle the problem This is one example of a strategic alliance formation to achieve a common objective
Types of Alliance
FORM OF RELATIONSHIP
Ownership
Consortia Joint Ventures
The Market
Speed of Market Change
Slow change
Resources
Asset Management Partners Assets Risk of losing assets to partner
High Risk
Low Risk
Types of Alliance
Joint Venture Networks Opportunistic Alliance Franchising Subcontracting Co-production
Oneworld; DLNA
Renault Nissan Alliance Coca-Cola and McDonalds Giving contracts to I.T. companies Dell Computers
12.9% per year for the past fourteen years, adding 24.5 billion in sales over the period 1991-2004
model
TESCO EXTRA
The 70,000+ sqftTesco Extra hypermarket format makes a
TESCO METRO
TESCO EXPRESS
THANK YOU !!