StrategyStrat should answer 3 ques
1. Where you are- starting point
2. where you want to be3. how to get there
Strategy is simplest insight, odnt complicate it
Strategy diamond- 5 elements
Arenas, vehicles-how going to serve, differentiator-, economic logic-how to generate profit, stajing and
pacing- at what rate you are growing and expanding
Why differntiate- customer pay more
Two views on stratgeyindustrial organisation view macro to micro view- every industry is impacted by external forces and
how we can leverage them
1. Study external environment
2. locate an industry with high potential for above avg returns
3. identify start for attractvie indstry
resource based view of above avg return micro to macro view- capabilites of organs and try to cater it
to other industry
stages1. identify firms resources
2. identify strength and weakness
3. determine firms capabilities
4. determine potential of firms resources and capabilities in term of competitive advantage
Why strategy is required1. scarcity of resource,innovation,
2. uneven distribution of resources
3.
why paytm ipo not subscribed,
Competitive advantage- something competitiorsc annot replicate
Test in strategy1. fit test2. perfromanc etest
3. competitive advantage test
5P of strategy- all are interconnected
1. Plan
2. position- how you want your customer to perceive you,
3. ploy- how to disrupt/challenge your competition
4. pattern-find the pattern and make stratgey acc
5. perspective- speaks about culture within organisation
Start management process1. Environment scanning- understand external environment
2. establishing vision and mission
3.
3. crafting a strategy
4. strategy implementation or execution
5. stratgey monitoring and evaluation
Clear the law, better the business
Political
Economic
SocietyTechnology
Environment-
Legal-
Environmnet, Business- Triple line
Porters 5 forces
Threat of new entrants- how easy or difficult is to enter new markets
Capital reqmnt
Size of organisation
Distribution network
Government policies and regulation
Cost of switching- dusre brand me jane ka cost
Substitute-different product but meeting sameneed like mbile is substitute of watch,calc,radio
Threat of substitutes is high whenCost of switching-low
Affordable and accessible
Quality and serivce offering better
Bargaining power of suppliers is low when
Cost of switching-low
Cost of substitute-low
If unique reqmt is low
Number os supplier is more
Bargaining power of buyer-more
Number of supplier is more
Cost of substitute-low
Cost of switching-low
Rivalry within industry-high
Competitors-more
Buyers price sensitive-more
Exit barriers-high
Growth rate-low
5 generic startegi
Cost leadership- low price more sale, buy in volumes from supplier,
Works best when
product is standarized, cost of switching is low
challenges- tech advacnement, do not fixate on cost,
Differentiation strategy-adding value to product to make it unique
Why differentiate-brand loyalty,sustain,edge over substitute,
Works well when-buyer have diverse needs and reqmnt,
Challenges-price sensitive, fake piece,high cost r&d,
Focus cost differentiation startegyWork when-sizeable number of customer
Focused DifferentiatonStuck in middle- neither differntiated player nor low cost
SW- internal
OT – external
Strength- maximinse
Opportunities- leverage
Sustainable competitive advantage- how long you could hold that one fluke advantage
V – valuable- what is value of product to the company
R rare- how rare or difficult it is for competitor
I inemitable how easy difficult to copy
N non substitute-if resource is vulnerable to substitute
O organised to capture value
Primary activitiesInbound logostics
operations
Outbound logistics- product shifting from org to customers
Marketing and sale- activities rrelated to pricing,promotion,discounts etc
Service- all the after sale service