Strategic Management – Learning Diary

Vision statement:
It is like the picture of the company in the future or what it aspires to be. A company’s vision
statement is the inspiration for the employees and provides the framework for all the strategic
planning. It describes what the company is trying to build and serve as a touchstone for the future
actions. It may apply to an entire company or to a single division of the company.

Mission Statement:
It is a short statement of an organization's purpose, identifying the scope of its operations: what kind
of product or service it provides, its primary customers or market, and its geographical region of
operation. It may include a short statement of such fundamental matters as the organization's
values or philosophies, a business's main competitive advantages. Mission and vision statements are
publicised as they give an impression of the core values of the company to the outside world and has
importance for external and internal stakeholders.

Strategic business objectives & strategic tactics:

They are goals deemed most important to the current and future health of a business. Objectives are
prioritized by an organization through a thorough analysis of business practices such as a SWOT
analysis. It is the year wise objectives which would help in achieving the mission and vision. It helps
in defining the strategic tactics of the company which are the plans which a company undertakes.

Operational efficiency:
It is the capability of an enterprise to deliver products or services to its customers in the most cost-
effective manner possible while still ensuring the high quality of its products, service and support. It
is often achieved by streamlining a company's core processes. According to Michael Porter,
operational efficiency is not a part of the overall strategy of a company.

Competitive Advantage and Strategic Sweet Spot:

We have learnt about the competitive advantage which an organisation can have over its
competitors. A competitive advantage is the feature which actually allows the company to perform
better than its competitors. Competitive advantage can be created by companies in two different
ways – cost leadership and differentiation. The company can offer the similar product being
currently offered at a much cheaper price which will help them in gaining the market share. It could
also be done by offering a different product and services than its competitors. We had also learnt
about the Strategic sweet spot of a company is “where it meets customer’s needs in a way that
rivals can’t, given the context in which it competes.

Value proposition, Role of Accountability Measures & Industry Structure:

It is important when understanding competitive advantage. If the value proposition is effective, that
is, that the value proposition offers clients better and greater value, it can produce a competitive
advantage in either the product or service. The value proposition can increase customer
expectations and choices. We had learnt about the various accountability measures like ROA, ROE,
Net profit, ROIC and Dupont Analysis which could help in measuring the success of the company.
Industry structure (oligopoly, monopoly, monopolistic etc.) also plays an important role in
formalising the overall strategy of the company in the long term.
3P’s of strategy and Strategic Management Process:
We had learnt about what business to be in, how should one go ahead and compete in that field, the
third one being how should the various functions be aligned with that. Strategic Management
Process is a series of five main steps which define the way an organization makes its strategy to
achieve its goals. It is a continuous process in which the organization decides to implement a
selected few strategies along with stakeholders, details the implementation plan and keeps on
appraising the progress & success of implementation through regular assessment.

Biocon Case:
In this case we had seen that the company wanted to expand its business into drug discovery which
was riskier and rewarding. Actually, the problem in the Indian Pharma industry has been the lack of
Venture capital and that makes it riskier because to get funds for such projects is very difficult as the
chance of failure is very high. The funding would come at an advanced stage. There was increasing
competition in the industry and the positive trend of the generics products was also decreasing the
overall margins. The company was following a sequential model and would make advantage of the
vertical integration. Biocon had been successful in developing drugs which would be used in the
treatment of cancer and diabetes. The patients of these were continuously increasing which would
help the company to grow further. The company had done well in the drug delivery and
development process in which it had outsourced the initial phases and had expertise in some of the
phases and was developing expertise in the later phases. This actually aligned with the company’s
overall goal. We had seen that the number of patents, the collaborations the company had and the
sales growth figures helped us in coming to the conclusion about the success of the strategy.

Wallmart case:
We have also learnt in the “Wallmart case” that the strategy of the company had been successful
because their Return on Equity, Sales Growth and Earnings per share was more in comparison to
their competitors. A part of its success was attributed to the external factors which included that
there was appreciable growth in the Sunbelt region and also in the less crowded non-metropolitan
regions which were in fact the focus of the company. The company had taken the first mover
advantage in a lot of smaller regions and that could be also because of the economies of scale. One
thing which it did was that it was maturing the market and the company’s operations in such regions
were highly profitable because of the higher margins which the company was charging because of
very less competition. They were using this as a cushion to fight aggressively against the K-Mart and
other strong competitors.

Wallmart was using the warehouse model and its stores were based on the inside out model which
was that the initial stores were near the warehouse first and then gradually away from it. They had
invested heavily on use of technology and they did not have any regional headquarters which
helped them in reducing the overall costs. Their strategy of having the lowest rentals and a strong
bargaining with the vendors had also helped them in taking the advantage over its competitors. They
had an innovative way of reducing the pilferage and their strong leadership in Sam Walton had also
played an important role which improved the morale of the employees and thereby contributing to
its success. We have seen that in this way a company can create a sustainable competitive
advantage over its competitors.