DOCSLIB.ORG

Corporate Planning : an Executive Viewpoint

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Corporate Planning : an Executive Viewpoint LIBRARY OF THE MASSACHUSETTS INSTITUTE OF TECHNOLOGY WORKING PAPER ALFRED P. SLOAN SCHOOL OF MANAGEMENT CORPORATE PLANNING: AN EXECUTIVE VIEWPOINT by Peter Lorange WP 985-73 May 1978 MASSACHUSETTS INSTITUTE OF TECHNOLOGY 50 MEMORIAL DRIVE CAMBRIDGE, MASSACHUSETTS 02139 Preliminary Draft CORPORATE PLANNING: AN EXECUTIVE VIEWPOINT by Peter Lorange WP 985-73 May 1978 Tentatively to be published by Prentice-Hall. This draft is preliminary; it is not yet edited. Not to be quoted. Comments solicited. TABLE OF CONTENTS ii Foreword (To Come) Chaoter One. Purpose of Corporate Planning: Strategic Decis ion-Making 1-1 1-1. Introduction 1-1 1-2. Allocation of Resources 1-2 1-3. Adaptation; Identification of Strategic Options 1-4 1-4. Integration; Narrow down Options 1-8 1-5. Learning 1-11 1-6. Outline of Book 1-13 1-7. Summary 1-17 - Footnotes 1-19 Chapter Two. A Conceptual Approach to Corporate Planning 2-1.. Introduction 2-1 2-2. Three Levels of Strategic Planning: The Concepts 2-2 2-3. Three Levels of Strategic Planning: Imple- mentational Considerations 2-7 2-4. Stages of the Planning Process 2-21 2-21 . 4-1: Stage One: Objectives-Setting 2-33 . 4-2: Strategic Programming 2-50 , 4-3: Budgeting 2-56 . 4-4: Monitoring 2-60 . 4-5: Managerial Incentives 2-5. A "Three by Five" Information Flow Model Of Corporate Planning 2-64 2-6. Summary 2-78 Appendix: An Example of a Complex Hierarchical Organizational Structure 2-81 Footnotes 2-38 Chapter Three. Auditing the Company's Strategic Position: Determining Planning Needs 3-1. Introduction 3-1 3-2. The Strategic Business Unit (SBU) Concept 3-3 3-3. The Concepts of the Experience Cur'/e and the Product Life Cycle as Premises for SBU Strategic Analysis 3-11 3-4. The Market Share/Market Growth Grid 3-20 3-5. Adaptation and Integration Needs of a SBU 3-26 3-6. Modifications of the SBU Strategic Position Matrix 3-31 3-7. Consolidation of Several SBU's 3-37 3-8. Corporate Strategic Planning Need Assessment: Fi- nancial Position 3-44 3-9. Corporate Strategic Planning Need Assessment: Structiiral Position 3-49 3-10. Portfolio Level Planning Needs: Synthesis 3-61 3-11. Assessment of Risk Exposure of Strategic Positions 3-66 TMS^n 3-12. When Should Strategic Audits of Planning Needs Be Carried Out, and by Whom? 3-76 3-13. Summary 3-78 - Appendix: A Portfolio Attractiveness Index: An Example 3-82 - Footnotes 3-87 Chapter Four. Implementation of Corporate Planning Systems: Gen - eral Pitfalls and Problems 4-1, Introduction 4-1 4-2. Implementation Pitfalls and Problems During The Objectives-Setting Stage 4-2 4-3. Implementation Pitfalls and Problems During The Strategic Programming Stage 4-28 4-4. Implementation Pitfalls and Problems During The Budgeting Stage 4-38 4-5. Implementation Pitfalls and Problems During The Monitoring Stage 4-51 4-6. Implementation Pitfalls and Problems During The Management Incentives Setting Stage 4-58 4-7. Summary 4-64 4-8. Footnotes 4-67 Chapter Five. Tailormaking the Corporate Planning System's Design 5-1. Introduction 5-1 5-2. Designing a Planning Systems Module to Meet a SBU's Planning Needs 5-3 5-3. "Top-Down versus Bottom-Up" Planning Emphasis 5-15 5-4. Front End versus Back End 5-19 5-5. Linkages between the Five Cycles of the Planning System 5-22 5-6. The Monitoring System 5-28 5-7. The Management Incentive System 5-33 5-8. Tailormaking the Planning System to Reinforce Shifts in Strategic Direction: An Example 5-35 5-9. Summary 5-42 Appendix: Business Planning Capabilities of a Highly Diversified Company 5-44 Footnotes 5-49 Chapter Six. Mcinaglng The Evolution of the Corporate Planning System 6-1. Introduction 6-1 6-2. The Task of Managing the Corporate Planning System over Time 6-2 6-3. A Strategic Management Point of View: Con- sistency 6-9 6-4. Overloading of the Strategic System 6-19 6-5. Strategic Filters 6-27 6-6. Illogical S3U Patterns 6-36 6-7. Modifying the Planning System to the Matrix Organizational Struct\ire 6-44 6-8. Planning Considerations in Multinational Corporations 6-48 6-9. An Operational Measure of Risk 6-55 6-10. Summary 6-59 - Footnotes 6-62 Chapter Seven. Executives' Roles in Planning 7-1. Introduction 7-1 7-2. A Behavioral Process 7-2 7-3. The Chief Executive Officer's Role in Planning 7-7 7-4. The Line Management's Role in the Planning Process 7-16 7-5. The Role of the Plannner 7-21 7-6. The Role of the Board of Directors in Planning 7-34 7-7. The Role of Outside Consultants 7-37 7-8. Summary 7-39 • Footnotes 7-41 Chapter Eight. Corporate Planning - A Synthesis 8-1. Introduction 8-1 8-2. A Rationale for Corporate Planning 8-2 8-3. The Elements of the Approach 8-5 8-4. Responding to Today's Needs 8-7 8-5 Emerging Trends and Challenges 8-10 8-6 Summary 8-12 Subject Index (To Come) 1-1 CHAPTER ONE Purpose of Corporate Planning: Strategic Decision-Making 1 - lo Introduction The purpose of corporate planning (also labeled long-range planning, strategic planning) is to be a management tool in the strategic decision- making process of a company. Its focus is clear: to aid in strategic decision-making. If an activity that goes under the label of corporate planning does not aid in the strategic decision-making of the firm it is not planning (and it is also wasteful), even though the activity may seem to" involve many of the "right" elements of planning, such as elaborate five-year plan documents. The problem frequently is that the five-year plan does often not fluence the strategic decisions; the key executives rely on other decision-making aids. Effective corporate planning, on the other hand, does not have to be elaborate, complicated or voluminous, but logical and focused on the strategic decisions that will have to be taken. The thrust of this book will be to operationalize the concept of corporate planning as a strategic decision-making tool. How can we operationalize corporate planning beyond the general decision-making thrust just stated? We think that there are at least four aspects of this task that need clarification: = corporate planning 's role in the allocation of the company's scarce resources such as fundsy manag'pjneat talent, or raw materials; - corporate planning' s role in assisting the firm to adapt to environmental opportunities and threats; identify the relevant 'options; provide for an effective strategic fit with the environment; 1-2 - corporate planning' s role in che process of choosing, strategic options that duly reflect the firm's own internal srzrengths and weaknesses; integration ; - finally, corporate planning 's role in the process o-z. building an organization that is learning about itself; a strenachened sense of professionalism. Let us discuss each of these aspects of corporate pl2.r:rri.ng as a strategic decision-making process in some more detail. 1-2. Allocation of resources Resources, most obviously funds, will have to be allcrr^ated in order to carry out a strategic decision. Let us discuss briefly a few examples of 1 such strategic resource allocation. For instance, the C'^ef Executive Officer (C.E.O.) and his senior management of a divisionalized company may be faced with the possibilities of whether to make a major commitment to expansion within a particular existing division or within another. Alter- natively, maybe management should be making a somewhat more evenly split resource commitment to both divisions? Another alternative might be to invest in an acquisition instead of continual pursuance of one's present businesses. Decisions of this type, taken explicitly or not, will rep- resent an option of senior management to redistribute the balance between the emphasis on the firm's different businesses. As such, the discretionary resource allocation tool might have a profound impact on a company's stra- tegic direction. Another example of strategic resource Allocation might be faced by a division manager who might make a choice with regard to how much of the discretionary funds generated from his "leading" product line should be placed back in the same product line in order to protect its future position versus how much funds he should want to divert into the development of new product lines. Again, the resource allocation pattern choice, this time with regard to the allocation of scarce resources between the various product directions, might have a profound impact on the strategic direction of a division. Even when it comes to a particular product line there might be radiccilly different alternatives for how to allocate resources to build up a competitive strength, ranging from a heavy "investment" in R & D to taking over a competitor who clearly has the skill, from establishing a strong competitive position in one market to investing in a more diversified distribution system, and so on. The allocation of strategic funds will again shape the strategy, this time for this particular product line. Strategic resource need not be funds only, but any resource that can be disposed of by the firm's management to create value to the firm. A list of such strategic resources might look as follows: (a) Funds, These will have to be available and free for discretionary use. Thus, funds accumulated in a covintry from which they cannot be trans- ferred but will have to be reinvested internally are not a strategic resource.
Load more

Recommended publications
  • Case Interview Toolkit
    Case Interview Toolkit KEY CONCEPT DEFINITIONS ................................ ................................ Page 2 SYNOPSIS OF STRATEGIC FRAMEWORKS ................................ ........ Page 5 STRATEGY CASE TYPES ................................ ................................ .... Page 1 3 Case Interview Toolkit , Page 1 of 20 KEY CONCEPT DEFINITIONS: The elements described below are a combination of concepts and frameworks intended to serve a primer on case preparation. Each concept is not appropriate for every case. It's assumed that the user has covered these concepts in coursework and is using this guide as a refresher. Economies of Scale Economies of scale are said to exist when the aver age cost (AC) declines as output increases, over a range of output. As AC declines with output increases, so must the marginal cost (MC) (the cost of the last incremental unit of output). The relationship between AC and MC can be summarized as follows: MC<AC = Economies of scale MC=AC = Constant returns to scale MC>AC = Diseconomies of scale The paradigm shape of the cost curve is U shaped. The generally accepted explanation for this is that AC initially declines because fixed costs are being spread ove r increasing output and then eventually increase as variable costs increase. The minimum efficient scale (MES) is the minimum level on the average cost curve. Economies of scale are not limited to manufacturing; marketing, R&D, and other functions can re alize economies of scale as well. Economies of Scope Economies of scope exist if the firm reduces costs by increasing the variety of activities it performs. Whereas economies of scale are usually defined in terms of declining average cost functions, it i s more customary to define economies of scope in terms of the relative total cost of producing a variety of goods together in one firm versus separately in two or more firms.
    [Show full text]
  • How Small Businesses Master the Art of Competition Through Superior Competitive Advantage
    121156 – Journal of Management and Marketing Research How small businesses master the art of competition through superior competitive advantage Martin S. Bressler Southeastern Oklahoma State University ABSTRACT Identifying and developing sustainable competitive advantage could be considered one of the most critical activities for a new business venture. The process can often be challenging to the typical small business owner, as the process can often be both difficult and time consuming. Developing competitive advantage can be especially demanding for small and new emerging businesses operating in industries where many other businesses already compete. Unfortunately, some new entrepreneurs lack an understanding of the process and/or fail to recognize the importance of developing sustainable competitive advantage for their business venture. In some instances, new business ventures neglect securing a market position where the business could have reasonable chance for success. In some cases, a business will struggle to compete with bigger competitors while focusing on price, while other businesses believe that the key to business success is to open their business and customers will rush to purchase their products and services. In this paper, the author examines significant research findings on small business strategy and offers a model approach that could enable business owners to better utilize business resources and strengths to increase their likelihood of success. Keywords: small business, strategy, competitive advantage Copyright statement: Authors retain the copyright to the manuscripts published in AABRI journals. Please see the AABRI Copyright Policy at http://www.aabri.com/copyright.html. How small business, page 1 121156 – Journal of Management and Marketing Research INTRODUCTION Developing competitive advantage can be considered a critical success factor for a small or new, emerging business venture.
    [Show full text]
  • The Strategic Management Frameworks
    TheThe StrategicStrategic ManagementManagement FrameworksFrameworks Arnoldo Hax Alfred P. Sloan Professor of Management TheThe FrameworksFrameworks forfor CompetitiveCompetitive PositioningPositioning •• PorterPorter •• ResourceResource--BasedBased ViewView ofof thethe FirmFirm •• TheThe DeltaDelta ModelModel Porter’s Framework for Explaining the Profitability of a Business Competitive Positioning Industry Structure Achieving sustainable Factors affecting competitive advantage industry profitability Strategy Formulation and Implementation Defining and executing the managerial tasks Elements of Industry Structure: Porter’s Five-Forces Barriers to Entry Rivalry Among Competitors - Economies of scale - Concentration & balance among competitors - Product differentiation New Entrants - Industry growth - Brand identification - Fixed (or storage) cost - Switching cost - Product differentiation - Access to distribution channels - Intermittent capacity increasing - Capital requirements - Switching costs - Access to latest technology - Corporate strategic stakes - Experience & learning effects Government Action Barriers to Exit - Industry protection - Asset specialization - Industry regulation Threat of new entrants - One-time cost of exit - Consistency of policies - Strategic interrelationships with other businesses - Capital movements among countries Industry - Emotional barriers - Custom duties - Government & social restrictions Competitors - Foreign exchange - Foreign ownership - Assistance provided to competitors Intensity of Rivalry Suppliers
    [Show full text]
  • Strategic Management
    This page intentionally left blank Strategic Management CONCEPTS AND CASES Editorial Director: Sally Yagan Manager, Visual Research: Beth Brenzel Editor in Chief: Eric Svendsen Manager, Rights and Permissions: Zina Arabia Acquisitions Editor: Kim Norbuta Image Permission Coordinator: Cynthia Vincenti Product Development Manager: Ashley Santora Manager, Cover Visual Research & Permissions: Editorial Project Manager: Claudia Fernandes Karen Sanatar Editorial Assistant: Meg O’Rourke Cover Art: Vetta TM Collection Dollar Bin: Director of Marketing: Patrice Lumumba Jones istockphoto Marketing Manager: Nikki Ayana Jones Editorial Media Project Manager: Ashley Lulling Marketing Assistant: Ian Gold Production Media Project Manager: Lisa Rinaldi Senior Managing Editor: Judy Leale Full-Service Project Management: Thistle Hill Associate Production Project Manager: Publishing Services, LLC Ana Jankowski Composition: Integra Software Services, Ltd. Operations Specialist: Ilene Kahn Printer/Binder: Courier/Kendallville Art Director: Steve Frim Cover Printer: Lehigh-Phoenix Color/Hagerstown Text and Cover Designer: Judy Allan Text Font: 10/12 Times Credits and acknowledgments borrowed from other sources and reproduced, with permission, in this textbook appear on appropriate page within text. Copyright © 2011, 2009, 2007 by Pearson Education, Inc., publishing as Prentice Hall, One Lake Street, Upper Saddle River, New Jersey 07458. All rights reserved. Manufactured in the United States of America. This publication is protected by Copyright, and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. To obtain permission(s) to use material from this work, please submit a written request to Pearson Education, Inc., Permissions Department, One Lake Street, Upper Saddle River, New Jersey 07458.
    [Show full text]
  • 01-The Firm 1
    Introduction to Engineering Business Studies 01-The Firm 1. A System A company can be modelled as a system, which converts inputs into outputs, and is affected by the external environment. There are a number of factors of production: • Natural Resources - All the natural resources used to produce goods and services, including raw materials. • Labour - The time and resources people devote to producing services or goods, and this is rewarded with wages. • Capital - Is used to buy all the equipment, buildings, tools and other manufactured goods or services. The return to capital or the payment for the use of capital is interest (generated by banks). • Information - Information is rewarded with knowledge, which can create an advantage for the firm. • Entrepreneurship - A special type of human resource, that organises the other 3 factors of production, makes business decisions, innovates and bares business risks, this is rewarded with profit. This is the same as the theory of the 4 M’s of Operations Management; • MEN • MATERIALS • MONEY • MACHINES Companies can also have different types of transformations; • PHYSICAL – Manufacturing • LOCATION – Transportation • EXCHANGE - Retailing • STORAGE – Warehousing • PHYSIOLOGICAL - Health Care • INFORMATIONAL - Telecommunications Introduction to Engineering Business Studies The outputs of a transformation include core services (delivers what the customer wants correctly, on time and competitively priced) and value-added services (builds relationship with the customer and is more difficult for competitors to copy): CORE • Core Products/Services VALUE ADDED • Information • Problem Solving • Sales Support • Field Support In developed countries, firms are more likely to be competitive if they provide a higher proportion of value added services, in addition to the core product/service.
    [Show full text]
  • Bachelor Thesis Organization & Strategy
    Bachelor Thesis Organization & Strategy It’s crowded enough in here already! Title: Incumbent strategies for deterring entry into an industry Topic: Industries, firms, competitive dynamics, and competitive advantage Name: Elmar Seghers ANR: 816632 Email: [email protected] of [email protected] Supervisor: Astrid Kramer Academic year: 2009-2010 Words: 7976 Preface My name is Elmar Seghers and I am a Strategic Management pre-master student of the Tilburg University. This bachelor thesis will give information on, how an incumbent firm can influence the height of entry barriers to prevent entrants from entering an industry. This bachelor thesis is written as a part of the pre-master programme of Strategic Management. I would like to thank Astrid Kramer for her support and useful feedback during the writing of this bachelor thesis. I would also like to thank all the member of the feedback group, Ad van Ballegooien, Debby van Deursen, Jan Klein Poelhuis and Tjeerd van Loosbroek, for giving me feedback on concept versions. This bachelor thesis is written for people with some economical of business background. Breda, 11-06-2010 Elmar Seghers 2 Table of contents Page number Summary 4 Chapter 1 Introduction 5 1.1 Problem indication 5 1.2 Problem statement 6 1.3 Research questions 6 1.4 Research design and data collection 7 1.5 Overview of rest of the chapters 7 Chapter 2 Entry Barriers 8 2.1 What are entry barriers? 8 2.2 Types of entry barriers 9 2.2.1 Cost advantage 9 2.2.2 Product differentiation 11 2.2.3 Capital requirements 12 2.2.4 Customer switching costs 13 2.2.5 Access to distribution channels 14 2.2.6 Government policy 15 Chapter 3 Entrants 17 3.1 Why enter? 17 3.2 Types of entrants 18 3.2.1 ‘Novo’ entrants vs.
    [Show full text]
  • Uncertainty in Learning Curves: Implications for First Mover Advantage
    UNCERTAINTY IN LEARNING CURVES: IMPLICATIONS FOR FIRST MOVER ADVANTAGE Michael J. Leiblein Fisher College of Business The Ohio State University [email protected] John S. Chen Warrington College of Business Administration University of Florida [email protected] Hart E. Posen School of Business University of Wisconsin-Madison [email protected] March 2021 Acknowledgements: The authors contributed equally to the study and are listed in the order determined by a random draw. The authors have benefitted from conversations with seminar participants at the University of Pennsylvania, University of Michigan, the University of Southern California, Rensselaer Polytechnic Institute, the University of Colorado, and the 2019 Academy of Management Review theory development workshop. In addition, we are grateful for specific comments and suggestions provided by Paul Adler, Jay Barney, Janet Bercovitz, Ashton Hawk, Michael Jensen, Steven Postrel, Jeff Reuer, Richard Saouma, Jordan Seigel, Tony Tong, and Maggie Zhou. Uncertainty in Learning Curves UNCERTAINTY IN LEARNING CURVES: IMPLICATIONS FOR FIRST MOVER ADVANTAGE ABSTRACT: The existence of a learning curve, in which costs decline with cumulative experience, suggests that early entry (and production) provides learning opportunities that create advantage by reducing future production costs relative to later entrants. We argue that this proposition is subject to an under-appreciated limitation — that progress down the learning curve may be uncertain. If there is uncertainty in the learning curve, then the taken-for-granted wisdom regarding the benefits of learning curves may over- or under-emphasize the value of early entry. We consider two forms of uncertainty — prospective (future production costs) and contemporaneous (current production costs).
    [Show full text]
  • Dynamics of Competitive Strategy
    CHAPTER 2 DYNAMICS OF COMPETITIVE STRATEGY LEARNING OBJECTIVES After studying this chapter, you will be able to: r Understand the dynamics of competitive strategy. r Have knowledge of competitive landscape. r Know the importance of strategic analysis in the formulation of strategy. r Learn some of the methods of competitive analysis that are used in business organizations. r Understand the terms core competence, competitive advantage. r Have an understanding of some of the methods used in portfolio analysis. r Appreciate the applicability of SWOT and TOWS analysis. Analysis is the critical starting point of strategic thinking. Kenichi Ohmae The idea is to concentrate our strength against our competitor’s relative weakness. Bruce Henderson © The Institute of Chartered Accountants of India 2.2 STRATEGIC MANAGEMENT CHAPTER OVERVIEW Competitive Landscape Strategic Analysis Industry and Competitive Analysis Core Competence Competitive Strategy Competitive Advantage Internal and External Analysis SWOT Analysis Globalisation 2.1 INTRODUCTION The business environment is highly dynamic and continuously evolving. The changes happening in the external environment challenge organisations to find novel and unique strategies to remain in business and succeed. As the world is getting smaller and competition is increasing, organisations have increasing pressure to develop their business and strengthen its competitiveness. Strategic thinking and strategic management are highly relevant and important for all the managers in organisations in order to achieve competitive advantage, high performance for success and to ensure company’s survival and growth. © The Institute of Chartered Accountants of India DYNAMICS OF COMPETITIVE STRATEGY 2.3 Competitive Strategy Competitive strategy of a firm evolves out of consideration of several factors that are external to it.
    [Show full text]
  • The Strategic Management Frameworks
    TheThe StrategicStrategic ManagementManagement FrameworksFrameworks Arnoldo Hax TheThe FrameworksFrameworks forfor CompetitiveCompetitive PositioningPositioning •• PorterPorter •• ResourceResource--BasedBased ViewView ofof thethe FirmFirm •• TheThe DeltaDelta ModelModel Porter’s Framework: Explaining the Profitability of a Business Competitive Positioning Industry Structure Achieving sustainable Factors affecting competitive advantage industry profitability Strategy Formulation and Implementation Defining and executing the managerial tasks Figure 5-1. Elements of Industry Structure: Porter’s Five- Forces Barriers to Entry Rivalry among Competitors Economics of scale Product differentiation Concentration and balance among competitors Brand identification Industry growth Switching cost Fixed (or storage) cost Access to distribution channels New Entrants Product differentiation Capital requirements Intermittent capacity increasing Access to latest technology Switching costs Experience and learning effects Corporate strategic stakes Government action Barriers to Exit Threat of Industry protection Threat of Asset specialization New Entrants Industry regulation New Entrants One-time cost of exit Consistency of policies Strategic interrelationships with other businesses Capital movements among countries Industry Competitors Emotional barriers Custom Duties Government and social restrictions Foreign exchange Foreign ownership Assistance provided to competitors Bargaining Power Bargaining Power of Suppliers of Buyers Suppliers Buyers Intensity
    [Show full text]
  • Strategic Management
    Strategic Management MBA Second Year Paper No. 2.9 School of Distance Education Bharathiar University, Coimbatore - 641 046 Author: Upendra Kachru Copyright © 2008, Bharathiar University All Rights Reserved Produced and Printed by EXCEL BOOKS PRIVATE LIMITED A-45, Naraina, Phase-I, New Delhi-110028 for SCHOOL OF DISTANCE EDUCATION Bharathiar University Coimbatore-641046 CONTENTS Page No. UNIT I Lesson 1 Corporate Strategic Planning 7 Lesson 2 Strategic Management Practice in India 53 UNIT II Lesson 3 Environmental Analysis of a Firm 65 Lesson 4 Internal Analysis of Firm 89 UNIT III Lesson 5 Strategy Formulation 129 Lesson 6 Strategies of Leading Indian Companies 144 UNIT IV Lesson 7 Tools of Strategic Planning and Evaluation 177 Lesson 8 Life Cycle Approach to Strategic Planning 194 UNIT V Lesson 9 Strategy Implementation 207 Lesson 10 Strategy Control 231 Model Question Paper 251 STRATEGIC MANAGEMENT SYLLABUS UNIT I Corporate strategic planning - Mission - Vision of the firm - Development, maintenance and the role of leader - Hierarchal levels of planning - strategic planning process. Strategic management Practice in India, Family run corporates. UNIT II Environmental Analysis & Internal Analysis of Firm: General environment scanning, competitive & environmental analysis - to identify opportunities & threat - Assessing internal environment through functional approach and value chain - identifying critical success factors - to identify the strength & weakness - SWOT audit - core competence -Stakeholders' expectations, Scenario-planning - industry analysis. UNIT III Strategy Formulation: Generic strategies - Grand strategies - Strategies of leading Indian companies - The role of diversification -limit - means and forms. Strategic management for small organisations, non- profit organizations and large multi product and multiple market organisations. UNIT IV Tools of Strategy Planning and Evaluation: Competitive cost dynamics - experience curve- BCG approach - cash flow implication.
    [Show full text]
  • A Theory of Total Factor Productivity and the Convergence Hypothesis: Workers’ Innovations As an Essential Element
    View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Munich RePEc Personal Archive MPRA Munich Personal RePEc Archive A Theory of Total Factor Productivity and the Convergence Hypothesis: Workers' Innovations as an Essential Element Taiji Harashima 31. May 2009 Online at http://mpra.ub.uni-muenchen.de/15508/ MPRA Paper No. 15508, posted 4. June 2009 01:58 UTC A Theory of Total Factor Productivity and the Convergence Hypothesis: Workers’ Innovations as an Essential Element Taiji Harashima† May 2009 Abstract A theory of total factor productivity (TFP) is needed to explain why substantial differences in international income have been observed. This paper presents a theory of TFP that incorporates workers’ innovations. Because workers are human and capable of creative intellectual activities, they can create innovations even if these innovations are minor. The creative activities of ordinary workers have been almost entirely neglected in economics even though the importance of workers’ learning activities has been emphasized by the theories of learning-by-doing and human capital. I examine this creative element and show that innovations created by ordinary workers are indispensable for efficient production. A production function incorporating workers’ innovations is shown to have a Cobb-Douglas functional form with a labor share of about 70%. The production function offers a microfoundation of the Cobb-Douglas production function and more importantly indicates that heterogeneous parameter values with
    [Show full text]
  • Product and Pricing Decisions
    ESSO_C11.qxd 6/16/08 6:16 PM Page 301 1111 Product and pricing decisions Contents 11.1 Introduction 11.2 The dimensions of the international product offer 11.3 Developing international service strategies 11.4 The product communication mix 11.5 Product positioning 11.6 Brand equity 11.7 Branding decisions 11.8 Implications of the Internet for collaboration with customers on product decisions 11.9 Green marketing strategies 11.10 Factors influencing international pricing decisions 11.11 International pricing strategies 11.12 Implications of the Internet for pricing across borders 11.13 Summary Case study 11.1 Zippo Manufacturing Company Learning objectives After studying this chapter you should be able to do the following: l Discuss the influences that lead a firm to standardize or adapt its products. l Explore how international service strategies are developed. l Discuss the challenge of developing new products for foreign markets. l Explain and illustrate the alternatives in the product communication mix. l Define and explain the different branding alternatives. l Explain what is meant by a ‘green’ product. l Discuss alternative environmental management strategies. l Explain how internal and external variables influence international pricing decisions. l Explain why and how prices escalate in export selling. l Discuss the strategic options in determining the price level for a new product. l Explain the necessary sales volume increase as a consequence of a price decrease. l Explain what is meant by experience curve pricing. l Explore the special roles and problems of transfer pricing in global marketing. l Discuss how varying currency conditions challenge the international marketer.
    [Show full text]