BBA 3rd Year Strategy Evaluation Long Question Answer

Q.16. What is Business Process Reengineering (BPR)? Describe Business Process Reengineering (BPR) models.

Ans. Business Process Reengineering (BPR): Before reaching to concept of business process reengineering, it is important to, first understand the meaning of business process. Business process can be defined as a set of actions or steps that convert inputs into outputs. For example, you are standing in a line outside the reservation counter at railway station. In this case, the ‘process’ is called ticket. The process starts with you standing in a line and ends with you receiving your ticket. Now, the steps to complete the process are that you and the counter personnel complete the transaction in time. If you would have to wait for long in a line, you must have felt that the process should be improved. Therefore, it is required to analyse and redesign the process workflow in order to get valuable output in shortest time period.

Business Process Reengineering (BPR) is therefore a method by which organisations alter and improve the business processes and performance to become more efficient and world class competitor. Process reengineering helps organisations to provide better and faster customer services with low operation cost.

Seven principles of reengineering suggested by Hammer and Champy, to streamline the work process and thereby achieve significant levels of improvement in quality, time management and cost.

BBA 3rd Year Strategy Evaluation Long Question Answer
BBA 3rd Year Strategy Evaluation Long Question Answer

1. Organise around outcomes, not tasks.

2. Identify all the processes in an organisation and prioritise them in order of redesign urgency

3. Integrate information processing work into the real work that produces the information.

4. Treat geographically dispersed resources as though they were centralised,

5. Link parallel activities in the workflow instead of just integrating their results.

6. Put the decision point where the work is performed and build control into the process.

7. Capture information once and at the source.

Business Process Reengineering Models

1. Determining Scope and Objective: Business process reengineering starts with determining the scope and objective, as shown in figure below, of the .of the processes to be reengineered, at this stage BPR team determines the limitations and scalability of new processes.

2. Identifying Existing Processes: Once the scope and objectives sung Processes: Once the scope and objectives are defined, the necessary information is gathered from customers, employees, red from customers, employees, end users, competitors, with latest technology, in order to understand the existing proce  order to understand the existing processes and the processes to be redesigned. This step helps managers to avoid previous  managers to avoid previous mistakes and provide a baseline for future improvement.

3. Creating an Action Plan: This ‘to state’ enables the managers  create a plan of action based on the gap found between current and the future states of the and structures. After identifying the workflow of existing processes, managers prioritise processes in order to redesign them.

4. Testing and Implementing Process: At this phase, testing and implementation of redesigned process takes place. This step is viewed as fasten results and the sausio end users and customers.

fig. Business process reengineering model.
fig. Business process reengineering model.

Suggestion for Reengineering

1. BPR must be accompanied by strategic planning, which must address leveraging IT as a competitive tool.

2. Place the customer at the centre of the reengineering effort-concentrate on reengineering fragmented processes that lead to delays or other negative impacts on customer service.

3. BPR must be ‘owned throughout the organisation, not driven by a group of outside consultants,

4. Case teams must be comprised of both managers as well as those will actually do the work.

5. The IT group should be an integral part of the reengineering team from the start.

6. BPR must be sponsored by top executives, who are not about to leave or retire.

7. BPR projects must have a timetable, ideally between three to six months, so that the organisation is not in a state of limbo’

8. BPR must not ignore corporate culture and must emphasise constant communication and feedback.

Q.17. Discuss the methodology of benchmarking.

Ans Benchmarking Methodology: Benchmarking method requires organisation to look outside the business box. They must look into other industries, regions or countries to analyse how others achieve their performance levels and to understand the processes they use. In this way benchmarking helps explain the processes behind excellent performance. When the lessons learnt from a benchmarking exercise are applied correctly, they help improving performance in important functions within an organisation or in key area of the business environment. Benchmarking should not be considered as a one-off exercise. To be effective, it must become an ongoing, integral part of an ongoing improvement process with goal of keeping abreast of ever-improving best practice.

Benchmarking process involves the following five key steps are as follows:

1. Understand the Existing Processes and Problem Areas:

This step is applied to understand the current processes, it requires information gathering from customers, employees, or suppliers through formal conversations exploratory research which is used to focus on specific groups, marketing research, surveys, questionnaires. Basically, this phase involves the identification of the processes of the organisation that are to be benchmarked.

2. Analyse and Identify the Business Processes of those Industries: This step involves analysing the processes of other firms or industries working in similar range of products and services. This step provides understanding of organisation’s current process practices and those of the organisations being used as benchmark. The questions that must be answered at the point are: Is the benchmark organisation better? Why are they better? By how much? What best practices are they using now or anticipated? How can we incorporate or adapt these practices into our organisation?

3 Identify Other Organisations that are Leaders in the Similar Processes: This step provides direction to identify the best class leaders in the same process. It involves determining the w s and techniques used by other companies. The process methodologies are also identified at this step.

4. Evaluate Own Business Performance with Other Business: This is the critical step, where firms measure their performance and processes technology with others. This helps to indentify the gaps between own firm’s processes and other’s. Such evaluation provide direction to improve the performance of own firm.

5. Implement Necessary Steps Improve the Processes: This step involves developing implementation plans which include identification of specific opportunities, funding the project and selling the ideas to the organisation for the purpose of gaining demonstrated value from the process.

BBA 3rd Year Strategy Evaluation Long Question Answer
BBA 3rd Year Strategy Evaluation Long Question Answer

Q.18. Explain the types of benchmarking.

Ans. Types of Benchmarking

There are several types of benchmarking as discussed below:

Process Benchmarking: This benchmarking concentrates on observing and investigating particular significant processes and operations of best practice firms providing similar services. The goal of this benchmarking is to analyse the office operations or processes of other firms.

Strategic Benchmarking: This type of benchmarking is used to improve overall performance of organisation. It requires evaluation of strategies and approaches organisations used to succeed. It involves observing how other industries compete, developing new products and services and improving capabilities for dealing with changes in the external environment.

Functional Benchmarking: There are various functional areas such as finance, information systems, human resource etc. Firms use this benchmarking to focus on their specific function or functional area and improve the workflow of that function accordingly. This sort of benchmarking can lead to innovation and dramatic improvements.

Product Benchmarkring: This is used to design the methods of developing new products or improve existing ones. This process can sometimes involve reverse engineering which is taking apart competitors products to find strengths and weaknesses.

Internal Benchmarking: This benchmarking involves identification and assessment of firm’s internal critical data or information. Firm’s may have business units in different regions or countries and each business unit has sensitive or standardised data, this benchmarking helps to collect that data and compare it to historical data.

External Benchmarking: This is used to analyse other firm’s and learn from them. Externa benchmarking requires comparison of working methodologies with external firms in order to expose new ideas, approaches, methods, products and services. This type of benchmarking can take

sianificant time and resource to ensure the comparability of data and information, the credibility of the findings and the development of sound recommendations.

Competitive Benchmarking: Competitive benchmarking is used by organisations to compare their policies, processes, performance, products and  services, and technology with their immediate rivals. This type of benchmarking is often undertaken by trade associations to shield the confidentiality.

Companies that are often Used as Benchmarks and their Areas of Excellence

1. Florida Power and Light (Quality Management).

2. L.L. Bean (Logistics).

2 Hewlett Packard (Research and Development).

4. Fuji Xerox (Total Quality Management).

5. Saturn (Engineering).

6. Microsoft (Marketing).

7. Xerox (Customer Satisfaction).

8. Honda (Suppliers Partnerships).

0.19. What is Total Quality Management (TQM)? How did thisnagement (TQM)? How did this concept originate?

Ans. Total Quality Management (TQM): TQM is a management system for a customer focused organisation that involves all employees in continual improvement of all aspects of the organisation. According to W. Edwards Deming, TQM is a management concept applied by firms to reduce the faults maised during the manufacturing products. TQM increases customers satista equipment and ensure workers have the highest level of training and productivity. Total quanty management is concerned with the improvement, development, deployment and maintenance of organisation systems that are required to perform various business processes.

Foundation of TQM: Although TQM techniques were adopted prior to World War II by a number of organisation’s, the creation of the total quality management philosophy is generally attributed to Dr. W. Edwards Deming. In the late 1920s, while working as a summer employee at Western Electric Company in Chicago, he found worker motivation systems to be degrading and economically unproductive, incentives were tied directly to quantity of output and inefficient post-production inspection systems were used to find flawed goods.

Deming teamed up in the 1930s with Walter A. Shewart, a Bell Telephone Company statistician whose work convinced Deming those statistical control techniques could be used to supplant traditional management methods. Using Shewart’s theories, Deming devised a statistically controlled management process that provided managers with a means of determining when to intervene in an industrial process and when to leave it alone. Deming got a chance to put Shewart’s statistical

quality-control techniques, as well as his own management philosophies, to the test during World War II Government managers found that his techniques could be easily taught to engineers and workers and then quickly implemented in over-burdened war production plants.

One of Deming’s clients, the U.S. State Department, sent him to Japan in 1947 as part of a national effort to revitalise the war-devastated Japanese economy. It was in Japan that Deming found an enthusiastic reception for his management ideas. Deming introduced his statistical process control, or statistical quality control, programs into Japan’s ailing manufacturing sector. Those techniques are credited with instilling a dedication to quality and productivity in the Japanese industrial and service sectors that allowed the country to become a dominant force in the global economy by the 1980s.

While Lapan’s industrial sector embarked on a quality initiative during the middle 1900s, most of the American companies continued to product mass quantities of goods using traditional management techniques. America prospered as war-ravaged European countries looked to the united state for manufactured goods, In addition, a domestic population boom resulted in surging V.), markets. But by the 1970s some American industries had come to be regarded as inferior to their

Asian and Europeand competitors. As a result of increasing economic globalisation during the 1980. ” by advanced information technologies, the U.S. manufacturing sector fell prey to more competitive producers, particularly in japan.

In response to massive market share gains achieved by Japanese companies during the late 1970s and 1980s, producers scrambled to adopt quality and productivity techniques that might restor their competitiveness. Indeed, Dueming’s philosophies and systems ere finally recongnised in the united States and Deming himself became a highly-sough-after lecturer and author. The ‘Deming Management Method’ became the model for many American corporations eager to iprove. And total quality management, the phrase applied to quality initiatives preferred by Deming and other management gurus, become a staple of American enterprise by the late 1980s. By the early 1990s, the U.S. manufacturing sector had achievedmarked gains in quality and productivity.

The Deming’s philosophy

Dr. W. Edward Deming was a protégé of Dr. Walter Shewhart, who pioneered Statistical process control (spc) at Bell Laboratories. He spent one year studying under  Sir Ronals Fisher, who pioneered design of experiments. Dr. Deming is credited with providi

1. Create constancy or purpose for improving products and services. 2. Adopt the new philosophy.

3. Céase dependence on inspection to achieve quality.

4. End the practice of awarding business or price along, instead, minimise total cost by working with a single supplier.

5. Improve constantly and forever every process for planning, production and service.

6. Institute training on the job.

7. Adopt and institute leadership.

8. Drive out fear.

9. Break down barriers between staff areas.

10. Eliminate numerical quotas for the workforce and numerical goals for management.

11. Remove barriers that rob people of pride in their work and eliminate the annual rating or merit system

12. Put everybody in the company to work to accomplish the transformation

0.20. Explain the role of employees in six sigma implementation.

Ans. roles of Employees in Six Sigma Implementation: Team leaders and members have the following roles and responsibilities for six sigma implementation process:

Yellow Belt: These people are at the entry level of six sigma | working knowledge of six sigma methodology. These professionals are responsible for managing smaller process improvement projects and also learn how to integrate six sigma methodologies to at the high level production. The main responsibility of this role is to have strong understanding of processes and to provide assistance to people who are at other levels or Six Sigma.

Green Belt: These are the professionals who take their responsibility after completing a formal training form six sigma implementation. These people work on small project in their knowledge area, under the supervision of black belts. These professionals have sound knowledge of problem analysis and quality related problems. Therefore, they work in quality improvement projects. A professional must have at least three of work experience in demonstrating the knowledge of six sigma tools and processes.

Black Belt: The term black belt is used for the team leaders who use a variety tools at each stage of six sigma implementation to define, measure, analyse and control variation in process quality and to manage and motivation people teams and communication. Without black belts six sigma teams may loose their confidence and become ineffective. These people have great skills of leadership, problem solving and nalysing. Black belts are drawn from mikkle management having experience of 5-7 projects or assignment. A six sigma black belt professional should be well versed in all the aspects of the DMAIC model I accordance with the six sigma principles.

They are capable in identifying non-value added elements the use of specific  tools.

Master Black Belt: It is the highest level of expertise. P ck belt are highly trained and skilled even more than the black o are responsible for strategic planning and implementation, statistical analysis and instruction black belts. In addition, MBBs are responsible helping the boun8″ iting and charting high impacts projects. These professionals are trained for perfect handling of the most difficult situations in the organization and disciplined improve men efforts

0.21. Discuss the methodology of the six sigma.

Ans. The Six Sigma Methodolgy: Following are the six s13 roanisations to improve business processes by elimination process der are also used to create new business processes.

DMAIC

This methodology is used when a process does already exist in your company buc effectively or is not meeting customer requirements.

D: Define Opportunity: Determine your customers and their requirements, define your projet scope, define overall process flow and required improvements.

M: Measure Business Performance: Measure all existing processes, develop data collection plan, gather data from all available sources, define defect, use customer surveys to determine shortfalls.

A: Analyse Opportunity: Identify gaps between current state of process and future performance, analyse relationship among processes, prioritise opportunities to improve process flow.

I: Improve Performance: Improve and optimise the target process by using analysis technique such as designing creative solution to fix the problem.

C: Control Performance: Control and correct if there is any variations. Control requires the development, documentation and implementation of an ongoing monitoring plan, commit the improvements by modifying systems and structures such as staffing, training, incentives.

DMADV

This methodology is used when a process does not already exist in your company and there is need to develop a new process.

D: Define Goals: Define project goals and objectives that are constant between business strategy and customer requirements.

M: Measure Quality: Measure and determine the qualities of production process and capabilities of producing a product.

A: Analyse Process: Analyse and evaluate different designs options and choose the best Pumum design in order to meet customers requirements.

D: Design Process: Detailed process design should be done. It is required to optimise the design

features.

V: Verify Design: Verify the design performance by executing pilot process to check its performance nud quality. This step also requires you to finally handover the design to the process owner.

BBA 3rd Year Strategy Evaluation Long Question Answer
BBA 3rd Year Strategy Evaluation Long Question Answer

Q.22. Discuss the various steps of strategy formulation proce

Ans. Strategy formulation requires a defined set of six stens for

steps are:

1. Define the organisation.

2. Define the strategic mission.

3. Define the strategic objectives.

4. Define the competitive strategy.

5. Implement strategies.

6. Evaluate progress.

Define the Organisation

The first step in defining an organisation is to identify the company’s customers. Without a strong customer base, whose needs are being filled, an organisation will not be successful. A company must identify the factors that are valued by its customers. Is the value based on a superior product or service relative to the competition? Are your customers buying your products for your low prices? Do you produce products that meet image needs of your customers?

Followirg are the ways in which companies can define themselves:

End Benefit: Organisations must remember that people are buying benefits not features. For example, if an airline only defined itself as being in the business of flying people from one place to another, then it would view its competition as being only other airlines. However, if it views itself as being in the transportation business, then it will recognise that its competition includes not only other airlines, but also trains, buses, car rental companies and other ways of getting people from one place to another place. An airline must highlight the benefits of using its method of transportation as a means of persuading customers to purchase its service. Furthermore, an organisation can explain how its product works or how it is built.

Inevitably, customers will ask the questions, ‘Whats in it for me?’ Companies must be able to answer this question in order to meet the needs of their customers. They must be able to respond effectively to the ‘so what?’ in order to influence customers to buy their product or service.

Target Market: Companies can become successful by identifying themselves with a particular target group. This focus should not be limited only to demographic segmentation (i.e. age, income, education, gender, income, family life cycle, culture) but also by psychographic indicators. For example, by understanding the values, attitudes, opinions and lifestyles of a company’s customers, the organisation can better provide ways in which to meet its customer’s needs.

For example, Nike has successfully identified itself not only with professional athletes, but with those who want to be part of the athlete world. Nike’s marketing message has made everyone who wishes to participate in sports feel as if they can achieve their athletic goals. While most people who purchase Nike products are not professional athletes, the people who buy Nike’s products are able to identify with Nike’s culture and feel like they are part of an exclusive group.

Technology: Computer companies, medical research companies and other companies that identify themselves with the tech world will find that they must be able to quickly adapt to changes in the marketplace. New products, services and inventions are frequently introduced, making this very difficult and challenging business environment in which to operate. For example, Genentech Inc. conduct genetic engineering and medical research for the pharmaceutical industry. This company uncovers and discovers new advances every day, making it challenging to develop a specific strategy plan for its products and services. However, by defining the company as being in the biotech industry it can develop a strategy for its overall corporate goals.

2.Define the Strategic Mission

An organisation’s strategic mission offers a long range perspective of what the organisation strives for going forward. A clearly stated mission will provide the organisation with a guide for Carrying out its plans. Elements of a strong strategic mission  statement should include the values that the organization holds, the nature of the business, special abilities or position the orgnsation holds in the market place and the organization vision for where it wants to be in the future.

3.Define the Strategic Objectives

This third step in the strategic formulation process requires an organisation to identify the performance targets needed to reach clearly stated objectives. These objectives may include: market position relative to the competition, production  of goods and services, desired marker share, improved customer services, corporaion expansion, advnces in technology and sales increases.

Strategic objectives must be communicated with all employees and stakeholders in order to ensure success. All members of the organisation must be made aware of their role in the process and how their afforts contribute to meeting

the organisations obiectives. Additionally, members of the organisation should have their own set of obiectives and performance targets for their  individual roles.

4. Define the Competitive Strategy

The next step in strategy formulation requires an organisation to determine where the marketplace. This applies not only to the organisation as a whole, but to each individuare unit and department throughout the enterprise. Each area must be aware of its role within the company and how those roles enable the organisation to maintain its competitive position.

Another step in the competitive strategy process requires an organisation to develop proactive responses to potential changes in the marketplace. As discussed in earlier readings, an organisation must not wait for events in the marketplace to occur before taking steps, they must identify possible events and be prepared to take action.

The final step in defining a competitive strategy is identifying an organisation’s resources and determining how those resources will be used. Each department, division, or location will have its own set of needs and a company must determine how it will allocate resources in order to meet those needs.

Three factors must be considered when determining the overall competitive strategy: the industry and marketplace, the company’s position relative to the competition and the company’s internal strengths and weaknesses.

The Industry: When evaluating the overall industry, factors to be looked at include:

(a) Size of the market.

(b) Past and potential market growth.

(c) Competitive profitability.

(d) New market entries.

(e) Industry threats.

These market factors must be evaluated on a regular basis, as small changes may have a large impact on an organisation’s business activities. For example, if an organisation becomes aware of new technology that is on the verge of being introduced into the marketplace, then it can avoid making any new plans that would involve the older, existing technology available. Also, if an organisation is considering global expansion, then it would be beneficial to be aware of emerging markets, other areas of potential growth and what other companies have already entered in those markets.

The Competition: An organisation cannot be successful unless it has a full understanding of the other players in marketplace. A company must be able to identify the strengths and weaknesses of the competition and analyse the ways in which the competition’s products or services meet the

Needs of customer base. Has the competition created a significant product differentiation st competition cornered a specific target market? Is the competition in full-scale con another company? It is essential for these questions to be answered in order to develon ropriate strategy for successful competition.

Evaluating competition requires a company to look at organisations that provide substitutes for its product or service as well as those who provide the same products and services.

Strengths and Weaknesses: Let’s go back to the traditional, well-known marketing tool of the SWOT analysis. As you may recall, SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. Opportunities and threats are external factors, strengths and weaknesses are internal factors.

When developing a competitive strategy, it is vital for an organisation to be fully aware of its internal strengths and how those strengths relate to the competition. These strengths should be maximised and leveraged to the company’s advantage as well as highlighted in all business and marketing activities that the company undertakes.

It is equally important for an organisation to take an honest look at its areas of weakness. This is where a company can become vulnerable to outside market conditions, such as competitive gains, advances in technology, economic shifts and other factors. By identifying areas in need of improvement and taking steps to remedy those areas, a company will be in a stronger competitive position.

5. Implement Strategies

Developing a strategy is only effective if it is put into place. An organisation may take all the necessary steps to understand the marketplace, define itself and identify the competition. However, without implementing the strategy, the organisation’s work will be of little to no value.

The methods employed for implementing strategies are known as tactics. These individual actions enable an organisation to build a foundation for implementation. Companies are able to identify which of their efforts are more successful than others and will uncover new methods of implementation, if necessary.

6. Evaluate Progress

As in any plan, a regular evaluation of processes and results is vital to ongoing success. An organisation must keep track of the progress it is making as defined by its strategic plan. If goals are not being met, the organisation must be adaptable and flexible to recognise that changes may be needed. An organisation should consider the following questions on a continuous basis in order to evaluate progress: Have market conditions changed that may require a change in corporate direction? Are there new entries in the marketplace to pose a competitive threat? Has the organisation been successful in translating their strategy into actionable steps? An organisation will be able to successfully implement its strategy both now and in the future through evaluating feedback.

Conclusion: A strategic plan is a living document that changes and grows as the conditions around it change. If an organisation recognises that it must constantly be aware of the business worlu around it and must be flexible to the changes that will inevitably occur, then it will be in a position to adapt and modify its plans to achieve maximum success.

Summary

  •  Strategy formulation is the course of action companies take to achieve their defined goals,
  •   All employees of an organisation should be aware of the companys objectives, mission and purpose.

(c) A strategic plan enables a company to evaluate resources, allocate budgets, and maximise ROI (Return on Investment).

(d) The lackof a strategic plan will result in an organisation being without direction or focus. The company will be reactive rather than proactive.

(e) The six steps for strategy formulation are: define the organisation, define the strategic mission, define the strategic and evaluate progress.

(f) Define the organisation requires a company to identify its customers by end benefits sought, by specific target markets, or by technology.

(g) define the strategic mission ensures that the company is able to identify its values, the nature of its business, its competitive advantage and its vision for the future.

(h) Strategic objectives should be defined based on performance targets and may include increases in market share, customer service improvements, corporate expansion, sales increases, production methods etc.

(i)  competitive strategy includes an evaluation of the overall industry and marketplace, the nature of the competition’s position and the company’s internal strengths and weaknesses

(j) A company must implement its strategic plan in order to achieve success. It must develop appropriate tactics, which are the action steps for meeting the strategies directives.

(k) Strategies must be evaluated and revised on a regular basis in order to meet the changing needs and challenges of the marketplace and business environment.

Q.23. Explain the concept, components and importance of corporate strategy. (2014, 15)

Ans. The concept, components and importance of corporate strategy can be discussed in the three heads as given below:

Concept of Corporate Strategy

Corporate strategy often called grand strategy or master strategy provides basic direction for strategic actions. Corporate strategy is the general plan of major action by which a firm intends to achieve its long-term goals. It falls into four categories: expansion, stability, retrenchment and combination. Firms involved with multiple industries, businesses, product lines or customer groups usually combine several grand strategies. Any one of these strategies could serve as the basis for achieving the major long-term objectives of a single firm.

In this aspect of strategy, broad decisions about the total organisation’s scope and direction are main concern. Basically, what changes should be made in growth objective and strategy for achieving it, the lines of business and how these lines of business fit together are considered. Corporate strategy involves four kinds of initiatives:

1. Making the necessary moves to establish positions in different businesses and achieve an

appropriate amount and kind of diversification. A key part of corporate strategy is making decisions on how many, what types and which specific lines of business the company should be in. This may involve deciding to increase or decrease the amount and breadth of diversification.

2. This may involve vigorously pursuing rapid-growth strategies in the most promising LoB’s

(Line of Business), keeping the other core businesses healthy, initiating turn around efforts in weak performing LoB’s with promise and dropping LoB’s that are no longer attractive or do not fit into the corporation’s overall plans. It also may involve supplying financial, managerial and other resources or acquiring and/or merging other advantages.

3. Pursuing ways to capture valuable cross-business strategic fitand turn them into competitive advantages especially transferring and sharing related technology, procurement leverage, operating facilities, distribution channels and/or customers.

4. Establishing investment priorities and moving more corporate resources into the most attractive LoB’s.

Components of Corporate Strategy

The major components of corporate strategy are purpose and objectives, vector, competitive advantage, synergy, personal values and aspirations and social obligations. Ansoff has used the term common thread’ for the purpose.

According to him, the common thread is a statement of relationship between present and future product market postures. Different components of corporate strategy are discussed below:

1. Objectives: Corporate objectives should be stated in such a way so that they may provide a clear idea about the scope of the enterprise’s business. Objectives give the direction for which action plan is formulated. Objectives are open-ended attributes denoting a future state. Objectives translate the purpose into goals. A few specific aspects about objectives are as follows:

(a) Have timeframe, (b) Be attainable, c) Be challenging, (d) Be understandable, (e) Be measurable and controllable.

2. Vector: Corporate strategy has one more important component i.e. vector. Vector gives the directions within an industry and across industry boundaries which the firm proposes to pursure. If an organisation has the objective to maximise sales, the series of decisions will be to enhance salesman’s commission, release nation-wide advertisement, introduce total quality management and introduce new product range. Vector signifies that a series of decisions are taken in the same direction to accomplish the objectives.

3. Competitive Advantage: Corporate strategy is relative by nature. In the formulation or corporate strategy, the management should isolate unique features of the organisation. The steps to be taken must be competitively superior. While making plans, competitors may be ignored. However, when we formulate corporate strategies, we cannot ignore competitors. If an organisation does not look at competitive advantage, it cannot survive in a dynamic environment. This aspect builds internal strength of the organisation and enhances the quality of corporate strategy.

4. Synergy: It means measurement of the firm’s capability to take advantage of a new product market move. If decisions are made in the same direction to accomplish the objectives there will be synergic impacts. The corporate strategy will give the synergy benefit.

Importance of Corporate Strategy

The best product, services, goals and management teams are of little use without a corporate strategy. Without a corporate strategy it is impossible for a corporation to have long-term plan or method to achieve objectives or goals, which are keys to any type of strategic planning. Corporate strategies are significant due to following reasons:

1. Focus: A formal corporate strategy is a crucial strategic tool because it allows a corporation to focus multiple resources on a single objective. Without a clear corporate strategy, companies lose sight of their main objectives and lack the drive and focus of what a well-designed corporate strategy provides.

2. Measurable Progress: A corporate strategy provides management with a benchmark to measure a company’s success or failure. As Peter Drucker, the famous management guru has is quoted as saying, ‘What gets measured improves’. However, it is difficult to measure the success of the corporation if one is not clear on what the strategy is.

3. Long-Term Success: A well thought-out corporate strategy allows a corporation to create plans and methods that will allow it to continue growing despite the ups and downs of the economy or changes in the market. Take for instance the baking soda brand arm and hammer. In the 70s, executives noticed their sales were dropping because their target audience was baking less. 10 achieve its goal of turning around the tide and increase sales, the company devised the strategy devising new reasons for people to buy their baking soda. First it sold its packs of baking soda to s rid of bad smells in fridges, then as part of environmentally friendly cleaning products, and now found in cat litter and toothpaste.

4. Other Benefits: These are as follows: (a) Corporate strategy rationalises allocation of scarce resources. (b) Corporate strategy motivates employees to shape their work in the context of Share

corporate goals.

  • Strategy assists management to meet unanticipated future changes.
  • Organisational effectiveness is ensured through implementing and evaluating the strategy.
  • Corporate strategy is a powerful tool to management to deal with the future which is uncertain and hazy in all respects.
  • Corporate strategy improves the capability of management in coping with the volatile external environmental forces.
  • Corporate strategy encourages the management to choose the best couse of action to realize the objectives.

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