MODULE 8: THE CONCEPT OF STRATEGY Structure Plans: A Plan is a goal-directed system of action.

It specifies the actions which must be taken and the sequence in which must taken and the sequence in which they must occur in order to achieve some future objective. Basic to all planning is the generic need which the company will seek to satisfy, i.e., its mission. This is clearly a top-management decision and one which cannot easily be altered one firm management has decided to commit the resources at their command to that end. a strategic plan is one which describes the allocation of a firms resources which the management believes will achieve the corporate mission with the greater efficiency over the long run. Supporting the strategy and contributing to its implementation are plans for the operations, logistics, and organization called for by the strategy, Together, these constitute a hierarchy of objectives, and plans to achieve the,m which make up the guidance system of an enterprise.

Strategy Tactic/Line of attack/on going process Plan Map/sketch/thinking ahead Planning scheduling/ settingup/preparation Mission task/ job/ assignment It basically addresses the questions: Where am I now? Where am I going? How will I go there? Vision - dream
Mission and Strategy As it is used in an everyday sense, the world strategy carries the connotation of a particularly adroit or skillful plan. Some writers plan. Been more precise and defined a strategy as a complete plan, so complete that it is unlike to be upset by any recognizable outside force. It is a set of direction which specifies which choices a firm will make in every conceivable situation which available information enables management to identify. The term strategy is derived from strategikos, a word which the Greeks used to describe what the commanding officer did in a military campaign. The military commander is charged with a mission and must allocate and position the forces under him in a way which offers the greatest probability of achieving it. Since the enemy is not likely to accommodate him by revealing what they plan to do, the commander must base his strategic decisions on assembled intelligence about the enemy, the terrain over which military operations will be conducted, and any other factors which have a bearing on the ability of his forces to function as well as those of the enemy.

Marketing Component Marketing Strategy That part of the companys strategic plan which deals with the development of its products and services, the stimulation of demand for them, the determination of their prices, and the makeup strategy. Its major elements are product and the service definition, promotion, pricing, and distribution. 1. Product Definition Since a product is simply a bundle of properties, it should possess those properties which fit the needs of target market in a way which will give the marketer the greatest competitive advantage. Due to the diversify of needs, few manufacturers produce but a single line of products. ( e.g. grinding wheels, power transmission equipment.) 2. Service Definition depending on the nature of the product offering and the needs of firms composing the target market, service maybe indispensable in winning and holding customer. 3..Promotion Advertising, personal selling, and sales promotion are all ways in which a marketer can stimulate demand for his products. In essence , promotion is the function of inducing customers and prospective customers to buy the companys products in quantities and at prices which yield satisfactory profits. 4. Pricing The prices at which products should be sold represent a complex interaction of ingredients which includes legal considerations as well as consideration of cost and demand. These consideration must be weighed against a background of competition and industry practice. 5. Channels there are a number of alternatives a manufacturer may employ in reaching non household buyers. In many market situation some are strikingly superior to others. Since the marketing channel is an extension of the manufacturing enterprise itself, channel strategy should embrace both internal marketing units of a firm and the external intermediaries. It is particularly important that channel recognize the emergence of new customer groups, impending changes in existing groups, and the impact of these on customer needs. Operating Plan While mission and strategy define the direction in which management intends to move an enterprise and the general means which will be employed to achieve progress in that direction, day to day implementation of strategy requires more detailed guidelines. The most important of the operating plans are: a. Tactics Plan The word tactics is derived from the greek word deploy, which referred to what military commander in the field did when he arranged his forces on a battled field in the presence of the enemy. Turning to business, one can identify a similar relationships although long and short are relative terms, tactical planning is a shorter that strategic planning because its purpose is to fulfill the strategy in a specific situation under a particular circumstances. Tactical planning is an activity of operating management at the department and district level. b. Policies a policy represents a guide decision rule to be applied in a given area. Policies deliberately sacrifice the flexibility of tactical planning in order to prevent lower-

level managers from making decisions which are too sensitive or too difficult to be left them. Programs Courses of action designed to achieve particular and (often) limited objectives are programs. Some programs may be recurring such as sales training programs, the training objectives and budget allocation are appoint to change with each new entering class. The type of programs which are rather typical of industrial marketers are incentive programs in support new products are attempt to penetrate new market, promotional programs to bolster sales in period of sagging demand, cost reduction programs to permit price adjustments on products under severe price pressure and product development programs to bring promising new product ideas to commercialization in the shortest possible time. Supporting plans since policies requires enforcement, management must usually make some provision for it. The exact detail and order of such provisions is generally referred to as procedure. A procedure defines a chronological sequence of action. It stipulates the precise nature and order of activity to be followed in putting a policy into effect. Programs may also require supporting plans if they involve special skills or special knowledge for their execution a project is confined to techniques and methodology the how to detail that is often needed to execute the phases program. A project is very flexible type of plan. It can be adapted to any undertaking which can be separated into phases with reasonably predictable termination dates. Logistics Plans Strategic and operational plans require resource for their implementation. Manpower, money, equipment, and facilities called for by strategic and operational planning must be acquired, assembled in the proper relationships, and assigned to the appropriate line and staff units. The system of action for accomplishing these ends are logistical plans. It is their function to provide the material and personnel support or business operations. Organizational plans Contrary to the impression one may draw from observing a great bureaucracy (either public or private) at work, organization is a means rather than an end. when other plans spell out the what, when, and how of the future action and the manner in which required human and physical resources will be acquired, organizational plans define the machinery which will perform the operations. They identify the relationships between personnel and resources as well as the authority and communication networks will produce desire action. The planning structure:

Module 9: Product Definition Generating New-Product Ideas It is almost truism that new product ideas should match the capabilities of the enterprise and be generated in sufficient number to present a real choice of opportunities. Both internal and external sources should be consulted. Internal Sources Stimulating a flow of ideas internally is largely a matter of gaining and holding the interest of groups in the organization. One means of doing this is to provide adequate machinery for prompt of doing this to provide adequate machinery for prompt acknowledgement, review, and decision regarding new product ideas submitted by insiders. Financial reward can also effective in generating ideas, particularly if they are offered promptly. Some of the more obvious internal sources of new-product ideas are research and development department, technical service staffs, salesmen, executive personnel, company sales records and patent departments. 1. Research and development departments for companies large enough to support them, R & D departments are usually fruitful sources of new concepts. Although they are very imaginative and accustomed to working new concepts. Although they are not always fully aware of commercial requirements of product, this limitation can be met in part through the efforts of the research director to create in his staff an understanding of cost and profit problems. An important characteristic of research personnel as a source is that they are typically thinking ahead to future technology and are not likely to be influenced by current industrial practices.