Resource Management
BITS Pilani Lecture -2 ; Total slides : 43 ,date: 30 /7/16 Swati Alok
Hyderabad Campus
BITS Pilani
Hyderabad Campus
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Definition of strategy
A strategy is the set of actions through which an
organization , develops resources and uses them to
deliver services or products in a way which its users find
valuable, while meeting the financial and other objectives
and constraints imposed by key stakeholders. Most
successful strategies give an organization:
– some property that is unique, or at least distinctive;
– the means for renewing its competitive advantage as the
environment changes.
Different types of stakeholder
Different stakeholders and objectives
Shareholder – dividend + stock price appreciation
Suppliers- predictable orders , bills paid
Creditors- commitment to met on time
Customers- safe products , value for price paid
Employees- fair day pay , benefits
Union- large body of fee paying members
Government- tax revenues
.
Strategic management: refers to the process of crafting
strategies , their implementation and evaluation of their
effectiveness.
Strategies bridge where the company is now , with
where it wants to be tomorrow.
Strategy Implementation
Strategy Evaluation
External Analysis
• opportunities
• threats
Identify the
Internal Analysis
• strengths
• weaknesses
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FIGURE 3–6 Worksheet for Environmental Scanning
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About Surf excel
Launched in 1954
Oldest detergent used in more then 20 countries
Very strong brand communication
Available in wide variety and product size. (surf excel blue, matic, quick wash, comfort in
5 kg, 2kg, 250grm)
Solid base company of Unilever (HUL) , employee 2lks, operated in 100 countries, $868
m in R&D;
Strong competitors, (tide, nirma, ariel, oxycean, sundry)
Substitute products (liquid detergent, bars)
Lack of control in supply chain mgmt
No famous brand ambassador
High price of product
Changing life style
Applying tactics and surprise
Explore new geographical market
Political effects, economical effect, legislative effect;environmental effect
Chances of price war
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FIGURE 3–7 SWOT Matrix, with Generic Examples
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FIGURE 3–8 Type of Strategy at Each Company Level
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Types of Corporate Strategies
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Concentration Strategy
• Horizontal Integration
– The process of acquiring or merging with industry
competitors
• Vertical Integration
– Expanding operations backward into an industry that
produces inputs for the company or forward into an industry
that distributes the company’s products
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Raw-Materials-to-Costumer Value-Added Chain
in the Personal Computer Industry
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Full and Taper Integration
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Transfer of Competencies at
Philip Morris ( Related diversification)
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Sharing Resources at Procter &
Gamble (related Diversification)
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Types of Competitive Strategies
Business-Level
Competitive Strategies
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Business strategies
Strategic Advantage
Uniqueness Perceived Low Cost Position
by the Customer
Strategic Target
Particular FOCUS
Segment Only
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Strategic Human Resource
Management
Formulating and executing Human resource policies
and practices that the company needs to achieve its
strategic aims.
Three approaches to HR strategies:
– The best fit Approach: Contingency (environment not
stable, If-then; HR strategy should be based on change in
environment)
– Best Practices Approach: One size fits all/circumstances-
Prescriptive in nature
– Resource based view: use its resources to create an
environment that is favourable to itself
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Porter’s Business Unit Strategies
Cost leadership –
- HR emphasis on efficient, low-cost production, highly
structured procedures, and discourages creativity and
innovation
Differentiation -
- HR emphasis on innovation, flexibility, and renewal of
the workforce by attracting new talent from other firms
Focus –
- HR emphasis would be cross between those described
for low-cost producers and differentiators
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Competitive strategies and work flow
system
strategy structure Design dimensions
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Organizations as bundles of resources
• Offices, laboratories, factories, equipment
Physical assets • Specialized equipment, important locations
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Examples of
Firms’
Capabilities
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The Four Criteria of Sustainable Competitive Advantage
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FIGURE 3–9 Southwest Airlines’ Activity System
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Southwest Airlines
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SHRM involves five phases:
Key Terms :
• SWOT analysis
• Corporate level Strategy ( Growth, stability, Renewal)
• Business level Strategy (Cost leadership. Differentiation,
Focus)
• Linking or aligning business level strategy with HR
functions
• 3 approach to HR strategy