PGDM Batch 2014-2016 - TERM IV

Business Policy and Strategic Management (BPSM)

Course Outline
Instructor: Prof N. R. Govinda Sharma (NRG)
Number of credits: Three (3)

Introduction
Strategy is about winning. Every business has the objective of winning. Strategy is
the coordinated means by which managers achieve the business objectives and
goals.
In the first year of Post Graduate Diploma in Management (PGDM) course, you
have gone through courses in functional areas such as marketing, operations,
finance, human resource management, systems and business ethics. Business Policy
and Strategic Management (BPSM) is a bridge course that integrates various
functional concepts that you would have learnt into a comprehensive whole in light
of the big picture and help you derive synergy. This is achieved as follows:
1. By developing in you the ability to clearly identify and define a strategic
issue on hand by analysing the situations, both internal and external, to the
firm. To identify the strategic issue, amongst several competing issues, is
the key to arriving at the right solution. After all, a a problem well-defined
is a problem half solved.
2. Providing an overview of the Strategy Management Process, that is, strategy
formulation, implementation and control
3. By introducing you to strategic frameworks, models and tools for
formulating strategies
4. Introducing you to corporate level, business level and functional level
strategies. The accent of this course will be on the business level strategy.
The details of functional strategies will be learnt under specialisation
streams, for example, Strategic HRM under HRM specialisation.
5. Teaching Business strategy as an approach of integrating a set of choices

concerning arenas (where to compete), vehicles to compete, differentiators,

staging & pacing and economic logic (the concept of Strategy Diamond)

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6. Help you, through SPACE matrix model, to arrive at quality strategic

alternatives which incorporate internal and external dimensions and then
choosing the appropriate option using QSPM model and ultimately
overlaying non-economic considerations such as ethics, culture. Remember,
there is no single best strategy; strategy is the process of choosing an option
amongst the alternatives. Such a task is challenging as you may not know
the outcome of that choice at the beginning of the process. So, the course in
strategy is an exercise at making subjective decisions based on objective
data.
7. Empowering you to draw up a Strategy Memo applicable in a real life
situation

Course Objectives
The course addresses the following specific objectives of the mission statement1 of
Shri Dharmasthala Manjunatheshwara Institute for Management Development
(SDMIMD) in the manner set out below:

Creating Inspirational Business leaders

Value creation

Dealing with change

Creating Inspirational Business Leaders

Inspirational business leaders are those who are inspired and therefore capable of
inspiring others. Only a lighted lamp is capable of lighting other lamps.

In the course of time, many of you would be Chief Executive Officers (CEOs) of
companies or better still, start your own company. You would like your company to
win and for that you need to take charge, plan, and direct affairs of the company.
Sometimes there could be events of crisis and you will require foresight to get your
company out of troubled waters. The BPSM course will provide you with the rudder
called strategy that helps you set your sails and navigate your ship called business.

The key characteristics of a strategic leader who leads to a high performance are
(see pages 30 33 of the text book; Strategic Management, An Integrated
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Approach, by Charles W L Hill & Gareth Jones, 9th Edition, Published by Cengage),
are 1) Vision, eloquence and consistency; 2) Articulation of the business model; 3)
Commitment; 4) Being well-informed; 5) Willingness of delegate and empower; 6)
Astute use of power; and 8) Emotional intelligence. You will learn about them and
get opportunity to put them to practice as follows:
1. A strategic leader should have a dream. She / he must be inspired. All of
have us dreams and we will learn to dream with our eyes open and this is
termed as Vision. Vision is not a pie in the sky. Mission is a way of
actualising the dream. You will learn about vision, and mission.
2. As the first step in formulating the vision, you will learn about defining the
business as the intersection of the three basic questions, Who is being
served?, What need is being served? and How are the customer needs
are being served?. (Business model is a managers conception of how the
set of strategies their company pursues should mesh together into a
congruent whole) (Abels model)
3. To reinforce the idea that strategy is all about integration. Integration of
concepts and functional strategies will be the leitmotif (the recurring theme)
of this course on strategy. Integration leads to dexterity in action and this,
permit me to mention, is yoga2.
4. A strategic leader should have the capability to identify an issue. You will
learn this through application of tools and frameworks analysis for resolving
the issue and arriving at appropriate strategies through models such as
Porters Five Forces Model and SWOT.
5. In the strategy Memo you will need to demonstrate vision and your ability
to articulate the business model
6. In the write-up and presentation, your skills and clarity of communication
will be honed
7. In meeting with the deadlines, your commitment is trained
8. While working teams (you will be forming teams for the strategy memo),
your skills of astute use of power is put to test
9. Each of you, as a member of the team, will have to take up a task and in
doing so, your willingness to delegate power and empower each other is at
test
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10. Team work and work pressure will call for Emotional Intelligence (EI) and
help you in development of EI.

You may volunteer and benefit by

participating in the Applied project on Yoga and its impact on

emotional intelligence of management students which will start in July
2015. You may please send me a mail at nrgovinda@sdmimd.ac.in on or
before 8 June 2015, 12 noon, for volunteering.

Value creation
Business is all about creating value and capturing a part of it. Strategy is a means
for creating value.

The value could be created by a dextrous combination of

internal strengths and external opportunities to compensate the internal weakness

and avoid or address the external threat. The ability to create value for a company
is inculcated by:
11. Imparting knowledge of value, cost, price, consumer surplus etc. in the
context of strategy (You must have surely learnt these concepts in the course
on Economics but then you are required to integrate all these knowledge
in light of the bigger picture in this bridge course called BPSM!)
12. Imparting knowledge of value chain analysis. Value is created integrating
knowledge about inbound logistics and outbound logistics (details will
come from the course, Logistics and Supply Chain Management),
Operations, Marketing & Sales (Do I need to tell you the source subject?!),
Human Resources Management (HRM), Technology (including Systems),
infrastructure..Once again, BPSM helps you to learn integrating the
knowledge acquired / to be acquired in various courses
13. Application of a variant of DuPont analysis that you would have learnt in the
finance course for the choice of functional strategies to create value at the
business level
14. Selection of appropriate strategy and suggestions for implementation of
strategy (including control tools such as Balanced Score Card)
An important component of the course is the Strategy Memo in which the student
is expected to clearly indicate ways of creating value for the chosen company (I
insist that the students take up real companies for study) under the given internal
and external condition. This requires extensive literature survey, application of
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Course Outline

tools for analysis of data and interpretation results.

PGDM 2013-15
Quality of referencing is

extremely important for an objective study and will add value to the study. The
quality of articles referred should be very good and this will add value to the work.
While use of resources on the internet is not discouraged, students have to recognise
that there is a world of knowledge beyond the internet! Deeper you dig, sweeter the
water.

Dealing with change

Strategy is about dealing with change. Strategic leadership is all about taking the
right decision based on changing exigencies. The plethora of instruments that come
under the ambit of strategic management can be tailor-made for specific situations
faced by companies. This is achieved through:
15. Introducing you to the dynamic nature of market through models such as
Product life Cycle. The strategy applied has to be appropriate to the stage
of product or industry life cycle; be it embryonic, growth, maturity or
decline
16. Teaching you the framework of Strategic Positioning Action Evaluation
(SPACE) matrix which helps you to identify the right set of strategies to suit
the combination of internal and external dimensions. These dimensions are
dynamic in nature. Quantitative Strategic Planning Matrix (QSPM) will help
you choose the strategy most suited for your organisation.
17. Introducing you to Porters Five Forces Model (in fact, you would have
learnt it other courses such as marketing but the accent is different in BPSM
course) which lets you know that the intensity of competition is product of
five (or, is it six?!) forces which are themselves dynamic in nature.
18. If you are keen in learning more about dealing with change, you may
register for the course Strategy in Action which will take you through
additional tools such as use of Options for securing against uncertainties

PEDAGOGY
The course will comprise of lectures, cases, strategy memo and discussions.
Required readings are indicated in the session plan. Students are required to study
the materials well before the scheduled classes. Remember that for every one hour
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of class interaction, you are required to put in two hours of self-study in a three
credit course (See page 7 of Student Information Book 2015-16; a copy has been
given to you).
An important component of the assessment is the submission of a written Strategy
Memo and presentation of the same. Guidelines for the strategy memo are provided
in this course outline and an illustrative strategy memo, The Viacom/ CBS merger
A corporate level strategy memo is in the course material your reference. The
strategy memo attached is illustrative but not comprehensive. You will use it as a
reference and elaborate the essentials.

Guidelines for writing and presenting the Strategy Memo

The Strategy Memo is an important experiential learning process and accordingly
assigned a higher weight in the evaluation. This is an extended version of SmallGroup Exercises given in your text, Strategic Management, An Integrated
Approach by Charles Hill and Gareth Jones (Reference 1), at the end of each
chapter. This is a team assignment but assessment will be based on the performance
of the team as well as the individual team members. For this purpose, teams of
students from each section are formed right at the beginning of the course. I expect
a maximum of

nine (9) teams from each section so that presentations could be

completed in three days. Each team will choose a real company and study a
contemporary situation and choose a strategy appropriate to the situation. Do not
take up very old situations which are already analysed (and reports are available
freely on the internet / library; plagiarism will attract serious downgrades) or
fictitious companies.

Choose preferably Indian companies for which data is

available in data bases such as CapitaLine, which are subscribed to by our library.
Start with a brief description of the company. Describe the companys business
model (See Ref 1). State the companys vision, mission, goals and objectives and
relate them to the Abells framework. Company websites / Annual reports can be
handy in obtaining information about vision and mission.

Take up a situation, for example, Sun Pharma gobbling up Ranbaxy Labs (See
Business India, April 14-27, 2014). Carry out analysis of firms Strength &
Weakness (Internal analysis) and Opportunity & Threat (External analysis). (See
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SWOT Matrix analysis in Strategy Analysis and Choice, Ref 3). Also consider
the political and socio-economic factors in the analysis (For example, Why did FDA
ban products from Rabbaxys facilities at Paonta Sahib, Dewas, Mohali and
Taonsa?). This will lead to the analysis of the present situation. List out the
possible courses of action to respond to the situation and recommend what, in your
opinion, is the best course of action considering all the aspects of finance, HR,
culture, market and competition (for example, how would competitors react?).
What should be the strategy of Sun Pharma to consolidate the acquisition given that
problem at Rabbaxy seems to be across the company? This would be the strategy
memo.

Strategy memo need not have to explain the outcome of the strategy as strategy
memo is only a projection (gazing into a crystal-ball sort of activity!). This is one
good reason as to why I am insisting on you to take contemporary cases. A few
years down the line we will know how good or bad your strategy was!

Choose one of the team members to be the Chief Executive Officer (CEO).
Designate a Chief Finance Officer (CFO), Vice-President (VP) (Marketing), VP
(HR), VP (Operations) and VP (Systems) amongst the team members. This will
help in building strategic leadership qualities and the art of delegation and
empowering. The memo will elaborate on the marketing, finance, production, HR,
systems and any other functional components of strategy as relevant and integrate
them. Cash flow data and sources of finance shall also be included.

Proposal for the Strategy Memo:

The proposal will indicate the topic of the study, a brief description of the business
situation, its importance in strategic terms, and references. The proposal will be
about 400 words (approximately one (1) A4 size word processed page). The files
shall be named in the following format only: A1_Strategy_Memo_Proposal.docx
and emailed to nrgovinda@sdmimd.ac.in so as to reach me latest by 12 noon of
17 June 2015 (*). In the above file name, A1 represents the team number; your
team submission will correspondingly have your team number such as A1, A2, B1,

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B2, C1, C2 etc. Late submissions will not be accepted and the teams submitting
after the deadline will be awarded zero marks.

The Proposal will be evaluated for 5 marks.

Interim Presentation:
The interim presentation will be developed from the proposal and will consists of
details of the strategic issues, Internal and external analysis involved (SWOT
analysis), strategic models and approaches that may be applied to resolve the issue
and financial analysis and forecasts. The interim presentation will be about 12 to 15
slides, maximum. Number the slides (use font size 24) at the bottom, right hand
corner.

The

files

shall

be

named

in

the

following

format

only:

A1_Strategic_Memo_Interim.ppt and emailed to nrgovinda@sdmimd.ac.in so as

to reach me latest by 12 noon of 15 July 2014 (*). Late submissions will not be
accepted and the teams submitting after the deadline will be awarded zero marks.
Each team will be given Fifteen (15) minutes for presentation and Five (5)
minutes for question and answers (Q&A). All the team members shall participate
in presentation and Q&A. Individual members will be evaluated.

The presentation will be evaluated for 10 marks.

Final Report:
The final report will be developed from the interim presentation and will include
your strategy recommendation for resolving the issue (Details of SPACE Matrix for
generating strategic alternatives and QSPM for choice of strategy) and
recommendation for change in organisational structure and culture. An abstract of
200 words is to be included. The final report, including the abstract, shall be about
4000 words (approximately ten (10) A4 size word processed sheets). The files shall
be named in the following format only: A1_Strategic_Memo_Final.docx and
emailed to nrgovinda@sdmimd.ac.in so as to reach me latest by 12 noon of 17
August 2014 (*). Late submissions will not be accepted and the teams submitting
after the deadline will be awarded zero marks.

The final report will be evaluated for 25marks.

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Style:
This style details indicated herein are applicable for all the reports to be submitted
by you, namely, the Proposal and the Final Report.
Please do not submit orphan documents with no identification tags. Include a
front page which indicates your PGDM batch (PGDM 2014-16), Course: BPSM,
Topic of the study, Status of submission (Proposal / Interim/ Final), and date of
submission, your team number and name but not your individual names or PGDM
numbers. Do not send pdf versions. Please send Word document to facilitate
review and annotation process.

Adopt single line spacing, Font: Times New

Roman, font size 12 and justified. Margin shall be one inch (1), all around. Adopt
UK English and grammatically correct, complete sentences.

Guidelines for case analysis & discussion

The primary text (Ref 1) includes a model for case analysis. The cases are drawn
from Indian and foreign contexts and covers various issues; FMCG & industrial
products; products & services; new economy and the traditional economy.

All students must come prepared for case discussion. Please note that class
participation attracts 15 marks (See Course Evaluation Scheme). Active
participation of the entire class is insisted upon. As all students are expected to be
aware of the case facts, I will not expect case facts to be delivered but instead expect

analysis and interpretation. Individuals will be asked to start the deliberations by

bringing out the issues and decision involved and their suggestions to resolve the
issues. You are not expected use ppts. The other students will then bring out their
versions.

The other students will then supplement the discussion with

contradictions and their own versions. I will then come in to sum up and give my
view of the matter, and the relevance of the case to our learning.

Note: (*): These dates may be revised as the session dates are known and as the
sessions advance. In the absence of any future communication in this regard, the
dates given here are to be taken as final. Requests for rescheduling of submission
dates will not be entertained.
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Course Evaluation Scheme

Component

% marks

Class participation

Remarks

15 Active constructive inputs to the class discussion including

case discussion (Refer Guidelines for case)

Quiz 1

10 Sometime before the midterm

Strategy Memo

Written Strategy submitted by the team will be evaluated.

Proposal

05 If any of the team member is free-riding (that is, not

Final Report

25 contributing), please write me a mail or meet me in person

individually. The erring team member will be penalised.

Strategy Presentation
Interim

Based on team work & individual presentation

10

Quiz 2

10 Sometime after the midterm and before the end term

End term

25

Total

100

Basis for evaluation:

The written memo and presentation should be of professional quality which could
be used in real life.

Evaluation of written Memo

The written Strategy Memo will be evaluated for:
1. Originality: Teams resorting to plagiarism will be seriously downgraded
2. Quality of referencing and bibliography. This is important in all the
reports, namely, proposal and final reports. Refer extensively to books,
journal, cases, dailies, magazines and data bases such as CapitaLine. Adopt
American Psychological Association (APA) sixth edition for the referencing
style (This is the default style under the menu Reference, submenu
Style). Referencing must be in the body text and include Bibliography at
the end. All the fields in the reference should be filled-in.
3. Contemporariness and importance of the study
4. Clarity of strategic concepts
5. Application of concepts, models and frameworks to the issue on hand
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6. Identification of the business issue and analysis of the internal and external
factors.
7. Practicality of implementation of the recommendation. (Please do not end
with recommendations like Increase advertisement, Improve quality.
Be specific in stating factors and strategies. See SWOT Matrix analysis in
Strategy Analysis and Choice, Strategic Management by Fred David
(Ref 3) for guidance.
8. The recommendation should be specific and defendable. Avoid opinions
such as I feel, I opine etc. The analysis will be based on facts and
references shall be cited (See illustrative memo).
9. Suggestion for Organisational Change and Control Mechanism (such as use
of Balanced Score Card)

Evaluation of Presentation
For evaluating the presentation, clarity of ideas presented, time management (in
case any team exceeds the time limit, marks scored by all the members of that team
will be reduced), communication skills and ability to take questions and answer
them will be the criteria. So, members who present first should not take undue time
and leave the tail-enders to speed-up the presentation. Provide adequate time for
all the members and rehearse a number of times for keeping the presentation within
the allotted time.

In all, for the Strategic Memo, the written report will be evaluated for 30 marks and
the presentation will be evaluated 10 marks.

References:
1. (Ref 1): Strategic Management, An Integrated Approach, Charles W L Hill
& Gareth Jones, 9th Edition, Published by Cengage. This is your text book
and you are expected to carry the text and the hand-out to all the classes.
2. (Ref 2): Strategic Management, Govinda Bhat & Govinda Sharma, First
Edition 2011, Himalaya Publishing House: This concise book is written in a
style easy to understand and has good examples from the Indian context.
3. (Ref 3): Strategic Management Concepts and Cases, Fred David, Prentice
Hall of India

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Session Plan BPSM PGDM 2013-15 batch

Session
No.
1, 2, 3

5, 6

7, 8, 9

Topics

Remarks

Module 1: Introduction to strategy

Porters Approach
Generic Strategies (Porters Model)
Low Cost, Differentiation, Focus
CK Prahlads Approach
Strategy as a stretch and leverage
Strategy Diamond
Levels of strategy:
Corporate, Business and Functional Level
Preparation for case analysis and discussion

Required Reading
(RR):
Chapter 1 (Ch 1)
of
Strategic
Management An
Integrated
Approach by Hill
& Jones (Ref 1)

Quiz 1

Date
to
announced

Module 2: Strategic Management Process

Abells model of business
Vision & Mission statements, External and internal
analysis, Choosing and alternative, Implementing a
strategy
Levels of Strategy Corporate, Business, Functional
Emergent and deliberate strategies, Strategy in practice
Module 3: Competitive Analysis and Choice of Strategy
Tools for competitive analysis
SWOT analysis
Competitive Profile Matrix
How are strategies decided?
Competitive Position
Types of strategic positions
Aggressive,
Competitive,
Defensive
and
Conservative
A tool for choosing strategic position: SPACE matrix

RR: Ch 1 of Ref 1

RR: Analysing a
case study and
writing case study
analysis (Ref 1)
Case 1: Nirma Challenging the established MNCs
Pre-class reading
and preparation for
the case is a must
Case 2: The Viacom/ CBS merger A corporate level Self-study: RR for
strategy
preparing Strategy
Memo Proposal
Submission of Strategy Memo Proposal (See submission
schedule for dates)
be

RR: Ch 6 of
Strategy analysis
and choice from
Strategic
management

concepts & cases

by Fred David
(Ref 3)

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Session
No.
10, 11, 12

13, 14

15,16

Course Outline

Topics

Remarks

Presentation of Interim Strategy Memo by teams

Three Teams randomly chosen on each day

Do not have more

than 9 teams per
section

Module 4: External analysis, Need, Identification of

opportunities and threats, Industry analysis, Porters Five
Forces Model, Role of macro-environment, Product Life
Cycle and strategies at different PLC stage
Module 5: Internal analysis
Tools
Value, price, customer surplus
Value chain analysis
Variant of DuPont analysis
Strategies for building competitive advantage
Case 3: Cola Wars Continue: Coke and Pepsi in 2010

RR: Ch 2 of Ref 1

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18, 19

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Module 6: Implementing strategy

Organisational structures
Control Mechanisms Balance Score Card
Quiz 2

RR: Chs 3 & 4 of

Ref 1

Pre-class reading
and preparation for
the case is a must
RR: Ch 11, 12 &
13 of Ref 1
Date
to
announced

be

Submission of Final Strategy Memo (see submissions

schedule for dates)
Case 4: Apple Inc. in 2010 HBS case
Pre-class reading
of
case
and
preparation is a
must
Course wrap-up

20
End term exams

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End Notes
1. The full text of the Mission statement of SDMIMD is To create
inspirational business leaders and entrepreneurs who will relentlessly pursue
individual organizational excellence, with creative tenacity, intellectual
maturity and social responsibility. SDMIMD will advance management
thinking and practices that draw upon the best in Indian wisdom, are
successful in dealing with change and effective and inclusive in value
creation for the individual and society (Source: page 1, Student Information
Book -2015-16). The specific objectives considered for implementation in
this course, BPSM, are italicized for emphasis.
2. Yogah karmasu kausalam, that is, yoga is dexterity in action. The full
sloka is as follows (chapter (Ch) 2, sloka (Sl) 50, Bhagavad Gita (BG)):
Buddhiyukto jahatiha ubhe sukruta-duskrute, Tasmad yogaya yujyasva
yogah karmasu kausalam. It is translated as The one fixed in equanimity of
mind frees oneself in this life from vice and virtues alike; therefore devote
yourself to yoga; work done to perfection is verily yoga (Chidbhavananda,
2002).

End of the document

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