1 Write a scenario to explain the failure of ERP implementation

ERP packages, if chosen correctly, implemented judiciously and used efficiently, will raise the productivity and profits of companies dramatically. But many a company fails in this because of a wrong product, incompetent and haphazard implementation and inefficient or ineffective usage. To work successfully, the ERP solutions need a lot of factors to click. There should be good people who know the business. The vendor should be good and his package should be the one best suited for the. Companys needs. The ERP consultants should be good. The implementation should be planned well and executed perfectly. The end-user training should be done so that the people understand the system, and the effect of their efforts on the overall success of the program. The introduction of the ERP system will dramatically change the job descriptions and functions of many employees. Employees who were earlier doing the work of recording information will, overnight, be transformed into decision-makers. For example, in the past an order entry clerks job was to enter the orders that came to him. With the implementation of a good ERP system, the order entry clerk becomes an action initiator. As soon as he enters the order into the system, the information is passed on to the sales, distribution and finance modules. The distribution module checks whether the item is in stock and if available, the item is dispatched and the information is sent to the finance module. If the items are not in stock, then the manufacturing module is given the information, so that production can start. The customer is informed about the status of his order. If the items are shipped, the finance module prepares the invoice and sends it to the customer. All these actions take place automatically as soon as the order entry clerk enters the information regarding the order into the system. Thus the order entry clerk is transformed from a data entry operator to a decision-maker whose actions can trigger a chain of actions. Many employees find this transformation difficult to accept. If the employees are not given proper training, well in advance, then the systems will fail. Another factor is the fear of unemployment. When procedures become automated, the people who were doing those jobs become redundant. So it is quite natural to have resistance from the employees. But the same employees can be trained in the new system and can work in more challenging and stimulating environments. For this also, the employees have to be told, in advance, as to what will happen and should be given ample time and training to make the transformation. Without support from the employees, even the best system will fail. So it is very important that the management should take the necessary steps, well in advance, to alleviate the fears of, and provide necessary training to their employees.
2 a. What is the use of transparency and information access?

This transparency and information access ensures that the departments no longer work in isolation pursuing their own independent goals. Each subsystem knows what the others are doing, why they are doing it and what should be done to move the company towards the common goal. The ERP system helps to accomplish this task by integrating the information systems, enabling smooth and seamless flow of information across departmental barriers, automating

business process and functions and thus, helping the organization to work and move forward as a single entity.
b. What are the limitations of ERP systems? How ERP packages help in overcoming theses limitations.

ERP systems serve an important function by integrating separate business functions materials management, product planning, sales, distribution, finance and accounting and others into a single application. However, ERP systems have three significant limitations: 1. Managers cannot generate custom reports or queries without help from a programmer and this inhibits them from obtaining information quickly, which is essential for maintaining a competitive advantage. 2. ERP systems provide current status only, such as open orders. Managers often need to look past the current status to find trends and patterns that aid better decision-making. 3. The data in the ERP application is not integrated with other enterprise or division systems and does not include external intelligence. There are many technologies that help to overcome these limitations. These technologies, when used in conjunction with the ERP package, help in overcoming the limitations of a standalone ERP system and thus, help the employees to make better decisions. Some of these technologies are: Business Process Reengineering (BPR) Management Information System (MIS) Decision Support Systems (DSS) Executive Information Systems (EIS) Data Warehousing Data Mining On-line Analytical Processing (OLAP) Supply Chain Management

Out of the above technologies MIS, DSS and EIS are forerunners of the ERP systems. Once the ERP system and the other technologies (like Data Warehousing, Data Mining, OLAP, etc.) are integrated, the MIS or DSS will become redundant as their functions will be taken care of by the new systems and they will be slowly phased out from the scene. With the competition in the ERP market getting hotter and hotter, and ERP vendors searching for ways to penetrate new market segments and expand the existing ones, tomorrows ERP systems will have most of these technologies integrated into them. In this session we will see how each of these technologies are related to ERP systems.
3 What is the use of JIT approach to any organization?

Basically JIT means to produce goods and services when needed, not 1 early and not too late. It is time based and often has quality and efficier targets. JIT is a production philosophy and not a technology. This is due the fact that it looks at the whole of the production system, and goes far p inventory control. The JIT system has been called numerous names, fr zero defects and synchronous production to stockless production at Hew Packard. The JIT system also uses the pull method of scheduling material flow (Kanban). A JIT system aims to make goods available just in time, and these can be parts, products or subassemblies and achieve some of the following benefits: Increased flexibility Parts reduction Increased quality Simplicity of system The increased flexibility allows a company the ability to react to changing events, i.e. change in customer orders, or design modifications. Increased productivity means that the shortest time and minimum of resources are needed to make a product. The overall objective of JIT is to produce parts in lot sizes of one, but this is not economically feasible due to the set-up cost being higher as compared to the carrying cost. At the heart of JIT, is a set of tools and techniques. To achieve the aims of JIT a disciplined approach is needed which incorporates three principles applied to the organization: Elimination of Waste Total Quality Management (TQM) Total Employee Involvement Ops Elimination of Waste

Waste elimination is basically removal of any activity that is not value-added, but first it has to be identified. These activities dont increase product value and are costly to the company. Examples of non-value-adding activities include traditional production methods, i.e. inspection of parts, holding stock, inventories, time, etc. Waste can be eliminated from these activities by removal of defects and by not over producing hence, make-to-order. Ops Total Quality Management TQM eliminates waste by eliminating defects. In a JIT environment, the aim is to prevent defects from occurring, and this is achieved by detecting problems at their source. The whole organization is involved in the process, right from the stages of manufacturing, product development and purchasing. Manufacturing uses statistical process control (SPC) and inprocess testing (to allow detection at source), while product development ensures that new products can be manufactured to specification. Purchasing makes sure the; the parts that are bought are of the required quality. HR Total Employee Involvement Total employee involvement has management providing the leadership which results in employees wanting to be involved in the processes. Opportunity provided through education and training, and work teams. P Kanban Most manufacturing companies view the making of a product as continuous from design, manufacture, and distribution to sales and customer se vice. For many companies, the heart of this process is the Kanban, a Japanese term for Visual record, which directly or indirectly drives much of tl manufacturing organization. It was originally developed at Toyota in tl 1950s as a way of managing material flow on the assembly line. Over the pa three decades the Kanban process, which is a highly efficient and effective factory production system, has developed into an optimum manufacturing environment leading to global competitiveness. The Kanban process of production is sometimes incorrectly described as simple just-in-time management technique, a concept that attempts to maintain minimum inventory. The Kanban process involves more than fine tuning production and supplier scheduling systems, where inventories are minimized by supplying the components only when needed in production, and work progress in closely monitored. It also encourages industrial reengineering such as a module and cellular production system, and group production techniques, where team members are responsible for specific work element and employees are encouraged to effectively participate in continuously in proving the Kanban processes within the Kaizen (continuous improvement concept. The Japanese refer to Kanban as a simple parts-movement system it depends on cards and boxes/containers to take parts from one work station to another on a production line. Kanban stands for Kan-card, Ban-signal. The essence of the Kanban concept is that a supplier or the warehouse should or deliver components to the production line as and when they are needed, so

that there is no storage in the production area. Within this system, workstation located along production lines only produce/deliver desired components when they receive a card and an empty container, indicating that more parts be needed in production. In case of line interruptions, each work station will only produce enough components to fill the container and then stop. In addition, Kanban limits the amount of inventory in the process by acting as an authorisation to produce more inventories. Since Kanban is a chain process in which orders flow from one process to another, the production or delivery of components is pulled to the production line. In contrast to the traditional forecast oriented method where parts are pushed to the line. The advantages of Kanban over the traditional push system are: A simple and understandable process Provides quick and precise information Low costs associated with the transfer of information Provides quick response to changes Limit of over-capacity in processes Avoids overproduction Minimizes waste Maintains control Delegates responsibility to line workers D Benefits of JIT JIT is continuously seeking to reduce inventory levels of work in process (WIP), raw-materials and finished goods. Therefore, less space is required with lower inventories so there is less chance of the product becoming damaged, spoiled or obsolete. Material handling of lots can be automated, and operations can be placed closer together, enhancing communication and teamwork. The following are some of the benefits of a properly implemented JIT system: Increased flexibility: This can be done through small batch sizes, which achieves faster throughput. Flexibility is a prerequisite, if small batch sizes are to be kept. A flexible workforce means that the operators must be multi-skilled which is done through training. The worker should also be free to move from low demand to high demand areas. Parts reduction: JIT continuously seeks to reduce inventory levels of raw materials, work in process and finished goods. Lower inventory means less space and less chance of the product being obsolete, damaged or spoiled. Work in process inventories are reduced as a firm implements the pull system. Raw material reduction is a key part of the JIT system and requires

a sound relationship with the supplier. Inventories can be reduced if products are produced, purchased, delivered in small lots. To avoid unnecessary production delays, materials must arrive just before they are needed, they must be correct material and must satisfy the quality specifications. Increased quality: When operating a JIT system, disruption has a minimum impact, so quality problems need to be eliminated. Benchmark: Quality Function Deployment, and service design can be used for device operations. Service employees need to learn the value of providing defect free services. D Simplicity of system: Product mix or volume changes as planned by Master Production Schedule (MPS), can be accomplished by adjust the number of cards in the system. Production orders are prioritized by the cards on a post. Production orders for parts that are running low are moved in front of parts that have more supply. O Potential Pitfalls of JIT Many companies fail to understand what JIT is and what it can mean to the because they fail to implement it properly. Most importantly, they need to aware of the tasks, resources, time scale and costs. For this, the system need the full backing of the top management. The JIT system will also fail if an adequate education programme is not provided. If careful planning process and control improvements are not strictly followed, they will result JIT not being realized. The planning stage will require dedication and t: and may also require the assistance of an external consultant(s). All above must be integrated with moves towards JIT purchasing, or again, JIT will not be achieved. The JIT system should not be viewed as a one scheme but as an ongoing continuous process. Computer-Aided-Design/Computer-Aided-Manufacturing (CAD/CAM) An increasingly popular tool for product design is Computer-Aided-Des (CAD). CAD systems are computer programs or integrated packages for we station hardware and software, that allow the user to draw and easily mo product designs on a computer screen. Advanced CAD systems provide signers with at least three major benefits. Graphics Capabilities: CAD systems allow the designer to view a product from different perspectives, including three-dimensional rotations, and various cross-sections. The designer can also make proportional changes in scale, or change the angle of an arc with the click of a computer mouse rather than having to redraw the entire product. Design, storage and retrieval: Some CAD systems can store the design characteristics of existing products and components. Then, for example, if a company needs a gear for a new product, the designer can enter the relevant information about the gear, such as its diameter, tooth pattern, and required hardness, into the CAD system. The CAD system determines whether the company is already using an identical or sufficiently similar gear, in which case a new one is unnecessary. If not, a gear that has similar properties may exist. The designer can then use the

design of this similar gear as a starting point for the new gear. This capability not only promotes the use of common components but also reduces design time. Automatic evaluation of specifications: One of the most time-consuming aspects of design for highly technical products is calculating whether or not product specifications, such as strength, heat resistance or aerodynamic drag, are satisfied. These calculations can be programmed into some CAD systems so that whenever the designer changes the design (by altering the shape or material to be used), these performance characteristics are recalculated automatically and compared to the product requirements. This is sometimes called Computer-Aided-Engineering (CAE). The overall benefits of CAD systems can be substantial. The features described above reduce development time and cost, and they improve product quality because more design options can be evaluated in greater detail more quickly. For example, Motorola used three-dimensional CAD to produce its award-winning MicroTac pocket sized cellular phone two years ahead of the competition. It is not uncommon for CAD systems to reduce product cycle times by 10-50%. Even greater time and cost reductions have resulted from recent advances whereby, CADengineered designs are converted automatically into software programs for computerized production machines. These are called Computer-Aided-Design/Computer-AssistedManufacturing (CAD/CAM) systems. This automatic conversion eliminates the costly and time consuming steps of having a person convert design drawings into a computer program for computer-controlled production equipment, such as robots or machine tools. CAD and CAD/CAM systems are not used by large automotive or electronics companies alone. Future Enterprises, the largest maker of wedding jewellery in the United States, reported that its CAD/CAM system reduced the time required to design and make jewellery from five months to one week.

Master of Business Administration-MBA Semester IV MI0030 E-Commerce and Web Design 2 Credits (Book ID: B0899) Assignment Set- 1
1 a. Why did Wal-Mart implemented QR system [5 Marks]

Quick response (QR) is a version of JIT purchasing tailored for retailing. Most often, keeping a store filled with merchandise is a task most shoppers never consider-until the product they want is out of stock. The frustration that shoppers experience sometimes gives way to thoughts of "How do retailers buy and stock products anyway?" The process is quite complex, given that a single retailer may purchase merchandise from thousands of vendors in a global market. The failure to stock merchandise that matches customer demand can be extremely costly. For example, in the soft goods industry alone, excess inventories, inadequate information, and related inefficiencies resulted in lost sales of more than $25 billion in 1994. To reduce the risk of being out of stock, retailers are implementing QR systems. QR provides for a flexible response to product ordering and lowers costly inventory levels. QR retailing focuses on market responsiveness while maintaining low levels of stocks. It creates a closed loop encompassing the retailer, vendor, and consumer chain, and as consumers make purchases the vendor automatically orders new deliveries from the retailer through its computer network. The bar-coded articles are logged by the cash registers at the point of sale, the inventory system of the store then determines the needed supply, and the system transmits an order message to the retailer. The availability of accurate information with respect to the current sales enables sophisticated marketing capable of responding to consumers preferences. One of the famous examples of QR systems was implemented in the 1980s by Wall-Mart. Wal-Mart invested half a billion dollars in computer and satellite communications networks, bar-code systems, scanners, and other QR equipment linking each point-of-sale terminal to distribution centers and headquarters in Bentonville, Arkansas. Many believe that it was this system that enabled WalMart to manage the explosive retail sales growth that catapulted the company to number one position in the US retail business. The system enabled the company to maintain high service levels and increase sales while reducing the inventory costs to one-fourth of previous levels. Also by empowering its individual stores to order directly from suppliers, even overseas, individual Wal-Mart stores reduced inventory restocking time from an industry average of six weeks to thirty-six hours. Moreover, by tracking every sale through the point-of-sales devices to see what product was selling in large quantities,

Wal-Mart stores were better able to keep their stores well stocked while maintaining tight inventories and low prices.
b. What are the functions of supply chain management?

Until recently, these inventory management strategies were implemented through very expensive computer systems and private networks. The cost was an insurmountable barrier for many small businesses, and these new business strategies created many side effects. For instance, because of the vast investments needed to implement JIT / QR, the manufacturer / retailer tended to reduce the number of its suppliers and move toward single sourcing-an undesirable outcome. What the manufacturer /retailer needs is a larger supplier base in order to be more competitive. How is this done? One solution is to implement these strategies using a common network infrastructure such as the proposed Information Superhighway as the enabling technology. Inventory management solutions (QR and JIT) address only part of the overall picture. Using QR or JIT may not be feasible if a company depends on an unresponsive supplier for key components. For example, a manufacturing company may develop the capability to assemble products quickly in response to customers orders but may find that this ability is constrained by suppliers long lead times. Hence, what is required is a technique for managing unanticipated problems (or perturbations) in the supply chain. Supply chain management (SCM) is also called "extending," which means integrating the internal and external partners on the supply and process chains to get raw materials to the manufacturer and finished products to the consumer. Most companies fail to integrate their supply chain strategies for a number of reasons, among them a lack of system integration due to fragmented supply chain responsibilities. However, in neglecting integration and the broader concept of supply chain management, firms might be missing an opportunity to cut costs and boost customer service. SCM rests on the premise that product excellence alone fails to guarantee corporate success. In fact, customers expect many services, including the prompt delivery of products to precise locations with near-perfect administrative and physical quality. Supply chain management includes the following functions: Supplier management. The goal is to reduce the number of suppliers and get them to become partners in business in a win/win relationship. The benefits are seen in reduced purchase order (PO) processing costs, increased numbers of POs processed by fewer employees, and reduced order processing cycle times. Inventory management. The goal is to shorten the order-ship-bill cycle. When a majority of partners are electronically linked, information faxed or mailed in the past can now be sent instantly. Documents can be tracked to ensure they were received, thus improving auditing capabilities. The inventory management solution should enable the reduction of inventory levels, improve inventory turns, and eliminate out-of-stock occurrences. Distribution management. The goal is to move documents related to shipping (bills of lading, purchase orders, advanced ship notices, and manifest claims). Paperwork that typically took days

to cycle in the past can now be sent in moments and contain more accurate data, thus allowing improved resources planning. Channel management. The goal is to quickly disseminate information about changing operational conditions to trading partners. In other words, technical, product, and pricing information that once required repeated telephone calls and countless labor hours to provide can now be posted to electronic bulletin boards, thus allowing instant access. Thus electronically linking production with their international distributor and reseller networks eliminates thousands of labor hours per week in the process. Payment management. The goal is to link the company and the suppliers and distributors so that payments can be sent and received electronically. This process increases the speed at which companies can compute invoices, reducing clerical errors and lowering transaction fees and costs while increasing the number of invoices processed (productivity). Financial management. The goal is to enable global companies to manage their money in various foreign exchange accounts. Companies must work with financial institutions to boost their ability to deal on a global basis. They need to assess their risk and exposure in global financial markets and deal with global information as opposed to local market information. Sales force productivity. The goal is to improve the communication and flow of information among the sales, customer, and production functions. Linking the sales force with regional and corporate offices establishes greater access to market intelligence and competitor information that can be funneled into better customer service and service quality. Companies need to collect market intelligence quickly and analyze it more thoroughly. They also need to help their customers (relationship management) introduce their products to market faster, giving them a competitive edge. In sum, the supply chain management process increasingly depends on electronic markets because of global sourcing of products and services to reduce costs, short product life cycles, and increasingly flexible manufacturing systems resulting in a variety of customizable products.
2. List out the Ecommerce opportunities for industries and give an example of your understanding for all the opportunities.

Following are some of the areas where e-commerce is witnessing rapid growth in the global markets. Indian software and services companies need to tap into some of these vertical segments to gain the maximum advantage in the e-commerce solution sector. 1. Financial services. A large number of users use the Internet for some form of financial guidance.
The new web e-commerce applications would include taking online payments using debit and credit cards, and setting up and amending paperless direct debit mandates. These processes were to be implemented on the organizations own hosting facilities, but required

interaction with remote services for payment card authorisation. Thorough consideration of the Payment Card Industry Data Security Standard3 (PCI DSS), issued by the PCI Security Standards Council4, had to be made to ensure compliance.

2. Stock trading. Online stock trading is nowadays one of the most demanding e-commerce utilities. The ability to offer market access at a competitive price is a key advantage of online stock broking companies and this is slowly happening in India too. As e-commerce and online stock trading spreads globally, governments walk a fine line between overregulation and being too lax,. In many cases, foreign countries are wary of making their securities regulations comparable to those in the United States, because looser laws usually attract more money. There is an enormous desire for capital. Is there a reluctance to introduce regulation because of it? Foreign markets encroaching on U.S. futures exchanges because the rules and regulations are not uniform. For example, U.S. securities law requires traders to enter a code before completing an electronic trade, something that isnt required of their foreign counterparts. By the time my guy puts in the five-digit number, the trade is gone. The European trader has beaten him, said Me lamed, who is a life GSB Council member. Our complaint is that the regulatory authority in the United States bridles us. The regulations should be changed to allow us to compete.--J.T.S. 3. Banking. Internet banking is now growing. Many banks like ICICI and HDFC are making inroads into this area. With the rapid expansion of the Internet, there are a number of initiatives underway for the creation of a secure cost-effective payment system which will be able to support growing commercial activities on the network. Although electronic payment systems for large payments have been in operation for some time, rapidly expanding volumes of foreign exchange and securities trading are increasingly at variance with the requirements for a cost-effective and efficient electronic payment system for making low value payments. Current progress in establishing such payment systems on the Internet is examined. The paper argues that the ultimate vision could be for a truly global and virtual marketplace requiring completely new institutional and legal structures and having a similarly profound impact on economic life to the medieval trade fairs which emerged in Europe in the 12th century. 4. Legal and professional services. Opportunities also exist for Indian companies in legal and other professional services. There are significant legal and regulatory implications of implementing an Internet business or of migrating from a traditional off-line business. In terms of opportunities for Indian legal service providers, the requirement for professional, legal and regulatory advice is expected to increase as the number of e-commerce users increases. 5. Tour and travel. The travel industry has readily adapted to e-commerce. There has been a growing emphasis on the search for alternative distribution channels within the sector, particularly with the railways and the airlines, as they seek to reduce costs. These sectors have adapted well because of their online reservation systems.

6. Healthcare. Healthcare represents one of the biggest expenditures of governments worldwide. The Internet has the potential to enhance communications, streamline processes and create new business opportunities, by providing high-quality administrative services and integrating information systems. Following are the Ecommerce applications for industries: 1. Information Delivery transport and Ecommerce applications: Transport providers are principally telecommunications, cable, and wireless industries; computer networks such as CompuServe or America O n l i n e ; a n d p u b l i c networks such as the internet. The distribution of information has become competitive market with a combination of offense and defense. Playing on the defense are telephone companies and cable television companies, providers t h a t h a v e e n j o y e d m o n o p o l y p o s i t i o n s f o r d e c a d e s . N o w , h o w e v e r , t h e i r enormous investments in wiring and equipment have become vulnerable ton e c o m p l e t i o n . P l a y i n g o f f e n s e a r e c o m p u t e r c o m p a n i e s t h a t o f f e r n e w hardware capability and software programs with the potential to define new markets. The computer companies are banking on public networks such as the Internet which is expanding at an astounding pace. 2. Inventory management and Organizational applications: With borders opening up and companies facing stiff global competition, managers need to catch on quickly to better ways of doing international business. Adaptation would include moving toward computerized, paperless operations, to reduce trading costs and facilitate the adoption of new business processes. Often t a r g e t e d b u s i n e s s p r o c e s s i s i n v e n t o r y m a n a g e m e n t . Solutions for these processes go by different names. In the manufacturing industry, theyre known as just-in-time inventory systems, in the retail i n d u s t r y a s q u i c k response programs, and in the transportation industry as consignment tracking systems. Inventory reduction is often a target as it averages 2 % of sales; and when the cost of inbound warehousing of raw materials or the cost of warehousing work in process inventory is included, the total often reaches6 % to 30% of sales. Electronic commerce projects seek to reduce this cost by as much as 90%.
3. Supply chain management: It means integrating the internal and external p a r t n e r s o n t h e s u p p l y a n d p r o c e s s c h a i n s t o g e t r a w m a t e r i a l s t o t h e manufacturer and finished products to the consumer. It includes Supplier management, Inventory management, Distribution management, Channel management, Payment management, financial management and Sales force productivity. These processes increasingly depends on electronic markets because of global sourcing of products and services to reduce costs, short product life cycles, and increasingly flexible manufacturing systems resulting in a variety of customizable products

4. Work group Collaboration Applications: Ecommerce represents the holy grail of connectivity; an internetwork that enables easy and inexpensive connection of various organizational segments to improve communications and information

sharing among employees to gather and analyze competitive d a t a i n r e a l - t i m e . I t also facilitates sales force automation by enabling salespeople to c a r r y p r o d u c t a n d r e f e r e n c e i n f o r m a t i o n i n o n e p o r t a b l e device. Other applications like video conferencing document sharing, and multimedia email are expected to reduce travel and encourage telecommuting. Organizational applications of ecommerce have to meet challenges of the new business environment where the emphasis is on service quality, flexibility and customization of production to meet customer needs. Advantages of E-commerce in the industries include the following: 1. 24x7 operation : Round the clock operation is an expensive proposition in the brickand-conquer world, while it is natural in the click-and-conquer world. 2. G l o b a l r e a c h : R e a c h i n g g l o b a l c u s t o m e r s i s r e l a t i v e l y e a s y o n t h e n e t compared to the world of bricks. 3. Cost of acquiring, serving and retaining customers is relatively cheaper to acquire new customers over the net 4. An extended enterprise is easy to build as it is a part of the connected economy. Internet provides an effective way to extend the enterprise beyond the narrow confines. Tools like ERP, SCM and CRM easily deployed over internet, permitting amazing efficiency in time needed to market, customer loyalty, on-time delivery and eventually profitability. 5. Disintermediation: Using internet, one can directly approach the customers and suppliers, cutting down on the number of levels and in the process, cutting down the costs. 6. Improved customer service to clients resulting in higher satisfaction and more sales. 7. Power to provide the best of both the worlds. It benefits the traditional business side-by-side with the internet tools. 8. A technology based customer interface with screen to face interaction ,which has the potential to both increase sales and decrease costs. 9. The customer controls the interaction. He customers control the search p r o c e s s , the time spent on various sites the degree of price/product comparison, the people with whom he or she comes into contact, and the decision to buy. In face to face interchange, the control can rest with either the buyer/seller or the community member. 10. Knowledge of customer behavior: While the customer controls t h e interaction, the firm has unprecedented access to observe and track individual consumer behavior. It is possible to track customer behavior like behaviors on web sites visited, length of stays on a site, page views on a site, c o n t e n t s o f w i s h l i s t s a n d s h o p p i n g c a r t s , p u r c h a s e s , d o l l a r a m o u n t o f purchases, repeat purchases behavior, conversion rates of visitors who have completed transactions and other metrics. 11. Network economics: It can be best expressed as a situation where the value of a product or service rises as a function of the number of other users who are using the
product. Word of mouth phenomenon that makes viral marketing a reality for consumer oriented e-commerce business such as ICQ in instant messaging system.

3 a. Visit any eBay or Amazon website and write what are the steps to be followed to transaction on any of these two websites Amazon.com is a virtual merchant and it includes books, electronics, toys and music. It is a B2C Business-to Consumer model having retail sales. It is more than just an online store. It is about managing the entire process by using technology as a tool for order processing and customer support. Following are t h e p r o c e s s e s involved.

1.V i s i t i n g t h e v i r t u a l m a l l : T h e c u s t o m e r v i s i t s t h e m a l l b y b r o w s i n g o n l i n e catalogue- a very organized manner of displaying products and their related information such as price, description, and availability. Finding the right product becomes easy by using a keyword search engine. Virtual malls may include a basic to
an advanced search engine, product rating system, content management, customer support systems, bulletin boards, newsletters components which make shopping convenient for shoppers. 2. Customer registers: The customer has to register to become part of the sites shopper registry. This allows the customer to avail of the shops complete services. The customer becomes a part of the companys growing database and can use the same for knowledge management and data mining. 3. Customer buys products: Through a shopping cart system, order d e t a i l s , shipping charges, taxes, additional charges and price totals are presented in a n o r g a n i z e d m a n n e r . T h e c u s t o m e r c a n e v e n c h a n g e t h e q u a n t i t y o f a certain product. Virtual malls have a very comprehensive shopping system ,complete with check out forms.

4. Merchant processes the order: The merchant then processes the order that is received from the previous stage and fills up the necessary forms. 5. Credit card is processed: The credit card of the customer is authenticated through a payment gateway or a bank. Other payment methods can be used as well, such as debit cards, prepaid cards, or bank-to-bank transfers. 6. Operations management: When the order is passed on to the logistics people, the traditional business operations will still be used. Things like inventory management, total quality management, warehousing, optimization and p r o j e c t m a n a g e m e n t s h o u l d s t i l l b e i n c o r p o r a t e d e v e n t h o u g h i t i s a n e - business. Getting the product to the customer is still the most important aspect of e-commerce. 7. Shipment and delivery: The product is then shipped to the customer. The customer can track the order/delivery as virtual malls have a

d e l i v e r y tracking module on the website which allows a customer to check the status of a particular order. 8. Customer receives: The product is received by the customer, and is verified. The system should then tell the firm that the order has been fulfilled. 9. After-sales service: After the sale has been made, the firm has to make sure that it maintains a good relationship with its customers. This is done through customer relationship management or CRM. 3. b. Explain the different types of aggregators with an example Classis wholesalers and retailers of goods and services are increasingly referred to as e- tailers . Sales can be made based on list prices or through auctions. I n s o m e cases, the goods and services are unique to web and do not have a traditional brick and mortar store front. Some of the aggregator models are: 1.Virtual merchant: T h i s i s a b u s i n e s s t h a t o p e r a t e s o n l y f r o m t h e w e b a n d offers either traditional or web-specific goods or services. The method of selling may be by list price or auction. An example of a service merchant is Facetime, which calls itself an application service provider. It offers live customer support for e-commerce websites(e.g. Amazon, eToys, Eyewire and OnSale). 2.Catalogue merchant: Catalogue merchant is a the migration of mail order to a web based order business (e.g.Levenger) 3.Surf-and-turf : This is a traditional brick-and-mortar establishment with Webstore front. The model has the potential for channel conflict. 4.Bit Vendor: T h i s i s a m e r c h a n t t h a t d e a l s s t r i c t l y i n d i g i t a l p r o d u c t s a n d services and, in its purest form, conducts both sales and distribution over the Web. 5.Subscription model: In this, the users pay for access to the site. High value-added content is essential (e.g. Wall St.Journal, Consumer Reports). Generic n e w s c o n t e n t , v i a b l e o n t h e n e w s - s t a n d , h a s p r o v e n l e s s s u c c e s s f u l a s a subscription model on the web.
Based on the electronic marketplace, the aggregator model bypasses distributors so that the buyers and sellers come together. To be more precise, the aggregators are the connectors between the buyers and the sellers. They are involved in the overall process of selection, organization, matching the buyers requirement with the p a r t i c u l a r s o f t h e a v a i l a b l e g o o d s , f u l f i l l m e n t o f t h e o r d e r s a n d e n a b l i n g t h e customers to create a value about the sellers

There are four types of aggregators as follows: 1. Content aggregators: They are among the first large scale sites on the web and mostly represent large publishing companies. E.g. Pathfinder.com. Their basic challenge is that content has to be

attractive enough to make the site viable. For example, CANOE and Hockey plus, that provides extensive statistics, analysis, pool information or cricinfo.com. 2. Mainstream aggregators: These include sites like Yahoo providing a Web directory and a search engine, along with a bunch of attractive tools like e-mail addresses, home pages, reminders, and many others. The most attractive feature of these sites is that they have an easy to remember URL which is one of the reasons for them to be the top traffic sites on the web. 3.Event aggregators: These are sites that provide in-depth content and tools tailored to the needs of a particular group, which doubles as a clearly defined c u s t o m e r b a s e , f o r e x a m p l e , mortgages-build tools, rates, advise and the ability to purchase a mortgage o n l i n e i n t h e s a m e p l a c e ( M i c r o s o t s H o m e advisor or Home Shark). 4.Shopping aggregators: Shopping aggregators let consumers roam through hundreds of sites and catalogues and find the best price in seconds. They help consumers sift through dozens of e-commerce sites. For example,compare.com and bizrate.com evaluate their quality on independent basis as in the case of consumer reports.

Master of Business Administration-MBA Semester IV MI0031- Technology Management 2 Credits Assignment Set- 1 (30 Marks)

1. Explain the term Diffusion? What is its importance in the context of technological innovation? Explain the various phases of diffusion?

2. Distinguish between technology adoption and technology absorption? Give suitable examples.

Adoption of technology can be defined as the successful implementation of technology and deriving the full potential of the technology. Adoption is relatively easy in a new enterprise rather than in an ongoing firm. Adoption of technology requires gearing up of all the resources such as internal and external infrastructure, human resource, raw materials, and even marketing. As there is no existing system in a new enterprise, it is easy to adapt to the acquired technology. Whereas, in an ongoing enterprise, the prevailing systems have to modified and the existing work processes, working environment and culture may have to be changed, which makes it more difficult. In other words, unlearning has to be done in an existing enterprise before learning of new technology starts. The concept of technology adoption has attracted much more attention in recent times due to the explosive growth of new technologies worldwide. Just within the last few years, business and consumer marketplaces have been exposed to the widespread use of the personal computer, the Internet, ubiquitous wireless communications and broadband communications.

Simon (1978) opined that many technologies that were transferred from developed to developing countries were not successfully adapted because of the inappropriateness of those technologies for developing countries. He studied the causes for inappropriateness of various technologies that were transferred from developed to developing countries, and identified the following as specific causes: 1. Missing preferences of local markets and consumers 2. Technology is based on in imported raw materials 3. Insufficient skills of local labour 4. Not scaled down to local market 5. Insufficient use of technology caused by the local labour, and 6. Excessive usage of capital goods and imported equipment. Other general reasons that he identified are 1. High cost of transfer 2. Environmental pollution problems 3. Impact due to plant location, and 4. Impact due to energy inputs.

3. What is meant by Generation and Development of Technologies? What are the steps involved in planning technology strategies?

Master of Business Administration- MBA Semester III MI0032 Java and Web design -2 Credits
Set 1

1. Explain the various rules for naming a variable in Java? Give one example for each. When you learned algebraic equations in school, you used x and y to represent values in equations. Unlike pi which has a constant value of 3.14, the values of x and y are not constant in equations. Java provides constants and variables to store data in programs. Java allocates memory to each variable and constant you use in your program. As in algebra, the values of variables may change in a program, but the values of constants, as the name suggests, do not change. You must assign unique names to variables and constants. Variable names are used in a program in much the same way as they are in ordinary Algebra. Each variable used in a program must be declared. That is to say, the program must contain a statement specifying precisely what kind of information (data type) the variable will contain. This applies to every variable used in the program, regardless of the type Naming Variables A program refers to a variable using its name. Certain rules and conventions govern the naming of variables. You must adhere to rules. Conventions help improve the readability of the program, but following them is not mandatory. Rules for Naming Variables in Java A variable name: Must not be a keyword in Java. Subsequent characters may be letters, digits, dollar signs, or underscore characters. Conventions (and common sense) apply to this rule as well. When choosing a name for your variables, use full words instead of cryptic abbreviations. Doing so will make your code easier to read and understand. In many cases it will also make your code selfdocumenting; fields named cadence, speed, and gear, for example, are much more intuitive than abbreviated versions, such as s, c, and g. Also keep in mind that the name you choose must not be a keyword or reserved word. Here is a list of keywords in the Java programming language. You cannot use any of the following as identifiers in your programs. The keywords const and goto are reserved, even though they are not currently used. true, false, and null might seem like keywords, but they are actually literals; you cannot use them as identifiers in your programs.
abstract assert*** boolean break continue default do double for goto* if implements new package private protected switch synchronized this throw

byte case catch char class const*

else enum**** extends final finally float

import instanceof int interface long native

public return short static strictfp** super

throws transient try void volatile while

Must not begin with a digit. Any variable name cannot begin with a digit. I,e. 2var,1inc etc Must not contain embedded spaces.

Can contain characters from various alphabets, like Japanese, Greek, and Cyrillic. Syntax for Defining Variables All the attributes of a class are defined as data members. The syntax used to declare a class variable is: <data_type> <variable_name>; As the braces {} are used to mark the beginning and end of a class, a semicolon ; is used to mark the end of a statement

2. What are the different methods under Buffered Input Stream and Buffered Output Stream? Explain the uses of random access file over sequential access file? The java.io package contains two classes, InputStream and OutputStream, from which most of the other classes in the package derive. The InputStream class is an abstract superclass that provides a minimal programming interface and a partial implementation of input streams. The InputStream class defines methods for reading bytes or arrays of bytes, marking locations in the stream, skipping bytes of input, finding out the number of bytes available for reading, and resetting the current position within the stream. An input stream is automatically opened when you create it. You can explicitly close a stream with the close method, or let it be closed implicitly when the InputStream is garbage collected. Remember that garbage collection occurs when the object is no longer referenced.

The OutputStream class is an abstract superclass that provides a minimal programming interface and a partial implementation of output streams. OutputStream defines methods for writing bytes or arrays of bytes to the stream. An output stream is automatically opened when you create it. You can explicitly close an output stream with the close method, or let it be closed implicitly when the OutputStream is garbage collected, which occurs when the object is no longer referenced. The java.io package contains several subclasses of InputStream and OutputStream that implement specific input or output functions. For example, FileInputStream and FileOutputStream are input and output streams that operate on files on the native file system.
java.io

Class BufferedInputStream
java.lang.Object java.io.InputStream java.io.FilterInputStream java.io.BufferedInputStream public class BufferedInputStream extends FilterInputStream

This subclass of FilterInputStream buffers input from an underlying implementation to provide a possibly more efficient read mechanism. It maintains the buffer and buffer state in instance variables that are available to subclasses. The default buffer size of 2048 bytes can be overridden by the creator of the stream. This class also implements mark/reset functionality. It is capable of remembering any number of input bytes, to the limits of system memory or the size of Integer.MAX_VALUE Please note that this class does not properly handle character encodings. Consider using the BufferedReader class which does.

Field Summary
protected buf byte[]

The buffer used for storing data from the underlying stream. number of valid bytes currently in the buffer.

protected count int The

protected marklimit int This is protected markpos int The

the maximum number of bytes than can be read after a call to mark() before the mark can be discarded. value of pos when the mark() method was called.

protected pos int

The index of the next character that will by read from the buffer.

Public Methods
Name Description

Overridden. Returns the available number of bytes that can be read from the input stream without being blocked. close Overridden. Closes the input buffer. equals (inherited from Object ) hashCode (inherited from Object ) getClass (inherited from Object ) mark Overridden. Marks the current position of the byte read so far in the input buffer. Overridden. Checks if fc2bb7b1-e8ab-44ca-a9a1-362d98852478 and bde7d3cbmarkSupported ef57-4231-9a8d-4578236481e1 are supported. clone (inherited from InputStream ) read Overloaded. Overridden. Overridden. Repositions the mark created by fc2bb7b1-e8ab-44ca-a9a1reset 362d98852478 to its last position when mark() was last called. skip Overridden. Skips reading a specific number of bytes. toString (inherited from InputStream ) available

Protected Methods
Name Description

finalize

(inherited from Object )

Buffered Output Stream:

Stores the data to be written into a buffer. The data is actually written when the buffer is full or when you empty the buffer by calling the flush method. Package: java.io Assembly: vjslib (in vjslib.dll)
public class java.io.BufferedOutputStream extends java.io.FilterOutputStream

Public Methods
Name Description

close equals

Overridden. Closes the output stream. (inherited from Object ) Overridden. Empties the output buffer, causing the stored data to be written to the flush output stream. hashCode (inherited from Object ) getClass (inherited from Object ) clone (inherited from OutputStream ) toString (inherited from OutputStream ) write Overloaded. Overridden.

Protected Methods
Name Description

finalize

(inherited from Object )

3.With suitable example, explain the difference between errors and exceptions. Explain the various types of exceptions. The term exception denotes an exceptional event. It can be defined as an abnormal event that occurs during program execution and disrupts the normal flow of instruction. Error-handling becomes a necessity when you develop applications that need to take care of unexpected situations. The unexpected situations that may occur during program execution are: Running out of memory Resource allocation errors. Inability to find a file. Problems in network connectivity. If an above-mentioned situation is encountered, a program may stop working. You cannot afford to have an application stop working or crashing, if the requested file is not present on the disk. Traditionally, programmers used return values of methods to detect the errors that occurred at runtime. A variable errno was used for a numeric representation of the error. When multiple

errors occurred in a method, errno would have only one value-that of the last error that occurred in the method. Java handles exceptions the object-oriented way. You can use a hierarchy of exception classes to manage runtime errors.

Arithmetic Exception, NullPointer Exception, ArrayIndexOutOfBounds Exception

java.lang.Object | +----java.lang.Throwable | +----java.lang.Error | +----java.lang.Exception | +----java.io.IOException | +----java.lang.RuntimeException | +----java.lang.ArithmeticException | +----java.lang.ArrayIndexOutOfBoundsException | +----java.lang.IllegalArgumentException | +----java.lang.NumberFormatException

Master of Business Administration-MBA Semester 4

MB0036 Strategic Management and Business Policy - 3 Credits Q.1 Explain how strategies are formulated and implemented.

Strategy Formulation and Implementation It is the crux of the strategic management process. Strategy refers to the course of action desired to achieve the objectives of the enterprise. Formulation, together with its implementation, constitutes an integral part of the management activity. Managers use strategies for different purposes such as to overcome competition, to increase sales, to increase production, to motivate the employees to provide their best, and so on. Implementation of a strategy is a crucial task as the formulation of it. There may be a lot of resistance during the implementation process. It is necessary for the manager to be very tactful to involve the members of his group in the formulation of strategy to facilitate the implementation process.

1.5.1 Stages in Strategy Formulation and Implementation a) Identification of mission and objectives b) Environment scanning c) Generic strategy alternatives d) Strategy variations e) Strategic choice f) Allocation of resources and formulation of organisational structure g) Formulation of plans, policies, programmes and administration h) Evaluation and control 1.5.2 Generic Strategy Alternatives They refer to the strategy alternatives in broader terms. After the nature of the business of the firm is defined, the next task is to focus on the type of strategic alternative, in general, the firm should pursue. The strategist seeks to identify the right alternative through questions such as: 1. Should we get out of this business entirely? 2. Should we try to expand? There are four strategy alternatives available to a firm or business: a) To expand b) To wind up or retrench c) To stabilize, and d) To continue its operations pertaining to its products, markets or functions. a) Expansion strategy can be adopted in the case of highly competitive and volatile industries, particularly, if they are in the introduction stage of product / service life cycle. b) Stability strategy is a better choice when the firm is doing well, the environment is relatively less volatile, and the product / service has reached the stability or maturity stage of the life cycle.

c) Retrenchment strategy is the obvious choice when the firm is not doing well in terms of sales and revenue and finds greater returns elsewhere, or the product / service is in the finishing stage of the product life cycle. d) Combination strategy is not a new strategy as it combines the other strategies. However, it is to be noted that it is better to evolve individual strategies and combine them rather than trying to evolve a complex combination strategy which could be cumbersome with loss of precious business time. It is best-suited to multiple SBU firms in times of economic transition and also when changes occur in the product / service life cycle. If a firm realises that some of its main product lines have outlived their lives, it may not be profitable to continue investment in the same product or SBU. The firm may choose to withdraw its resources from this area (or SBU) (Retrenchment strategy) and follow an Expansion strategy in a new product area. Combination strategy is best suited when the firm finds that its product-wise performance is uneven, or all or most of its products differ in their future potential. Generic Strategy Alternatives Expand Retrench Stabilise Combination Pace Business Pace Business definition definition Add new Find new Drop old products ones pro-ducts Business Pace Definition definition or Pace De-crease maintain Make Drop old product package while developchanges, adding ment quality new improve- products ments Find new PeneDrop Reduce maintain Protect Drop old territories trate distribution market share market customers markets chan-nels shares, while focus on finding market new niches customers Forward, Increase Be-come De-crease maintain Improve Increase vertical capacity cap-tive process produc- capacity integracom-pany R&D tion and tion efficiency improve efficiency

Products

Markets

Func-tions

Table 1.1: Generic Strategy Alternatives Sometimes, a combination of a few or all of these strategies may be necessary. Any change must be contemplated considering what is to be done (Business definition) and the speed (Pace) with which it is to be done. Each of these alternatives has to be evaluated on its merits.

Examples of Strategic Alternatives: If the firm wants to grow substantially in terms of size, expansion is the obvious alternative. But in this process, other objectives may take a back-seat, at least in the short run. In case of recession, retrenchment is the most preferred strategy, involving dropping of unviable products, reduction in non-performing assets, withdrawal from the markets, and reduces the scale of activity. In the process, the overhead costs are purposefully reduced to ensure that the expenditure continues to be productive. These efforts will ultimately enhance the profitability. At times, the company may realise more money by liquidating its operations than by continuing. In such a case, to achieve the goal of improving cash value, the strategy is to sell a part of its assets, realise the sale proceeds, and invest the same profitably elsewhere. If an entrepreneur wants to maintain control over a business, stability strategy may be a better strategy. Goal of improving cash value

 Most timber depots in sprawling open places, located in the outskirts of the city for decades, have been making more money by selling a part of their open land than by doing timber business. In view of the substantial growth in the real estate in the city outskirts, most of them could sell their surplus land (main roadside) to construction firms for phenomenal sums. In this process, they could successfully create capital assets with a tremendously appreciated value. Further analysis showed that they earned more on these capital assets than in the timber business. However, since the values are further appreciating, can we offer a better strategy. A strategy is a means to an end. If an organisation wants to perform better in the long run, it has to select an appropriate strategy and pursue it vigorously. In this process, it might face certain hardships. Also, it has to make necessary changes in its strategy. A change in strategy should not be construed as a sign of failure. 1.5.3 Strategic Alliances Strategic alliances constitute another viable alternative. Companies can develop alliances with the members of the strategic group and perform more effectively. These alliances may take any of the following forms: a) Product and/or service alliance: Two or more companies may get together to synergise their operations, seeking alliance for their products and/or services. The product or service alliance may take any of the following forms: A manufacturing company may grant license to another company to produce its products. The necessary market and product support, including technical know-how, is provided as part of the alliance. Coca-cola initially provided such support to Thums Up. Two companies may jointly market their products which are complementary in nature. Chocolate companies more often tie up with toy companies. TV Channels tie-up with Cricket boards to telecast entire series of cricket matches live. Two companies, who come together in such an alliance, may produce a new product altogether. Sony Music created a retail corner for itself in the ice-cream parlours of Baskin-Robbins. b) Promotional alliance: Two or more companies may come together to promote their products and services. A company may agree to carry out a promotion campaign during a given period for the products and/or services of another company. The Cricket Board may permit Cokes products to be displayed during the cricket matches for a period of one year.

c) Logistic alliance: Here the focus is on developing or extending logistics support. One company extends logistics support for another companys products and services. For example, the outlets of Pizza Hut, Kolkata entered into a logistic alliance with TDK Logistics Ltd., Hyderabad, to outsource the requirements of these outlets from more than 30 vendors all over India for instance, meat and eggs from Hyderabad etc. d) Pricing collaborations: Companies may join together for special pricing collaborations. It is customary to find that hardware and software companies in information technology sector offer each other price discounts. Companies should be very careful in selecting strategic partners. The strategy should be to select such a partner who has complementary strengths and who can offset the present weaknesses. The acid test of an alliance is greater sales at lesser cost. It is a common practice to develop organisational structures or modify them, if necessary, to support the alliances and make them successful. Logistic Alliance Pizza Hut restaurants do not stock more than three days of their inventory. The standard for distribution centres or warehouses is a stringent 14 days, to minimise the costs and optimise quality control. This involves round-theclock monitoring of pick-ups and truck movements. Most of the items are perishable and the companys standards cover the entire delivery schedules. For in-city delivery, the truck is monitored from the time it leaves the distribution centre till it reaches the restaurant. Not just that the time taken in offloading is noted too. The restaurant gives a strict 30 minutes window in which time the delivery is to be completed. 1.5.4 Considering Strategy Variations There can be a number of variations of the generic strategy alternatives. For instance, if the strategy is to expand, then the alternatives are internal expansion or external expansion. Internal expansion can be achieved through any of the following approaches: Penetrate existing markets Add new markets Add new products, and so on

Similarly, external expansion can be achieved through mergers or acquisitions. In most IT Companies, subsidiaries are created to develop at the earliest upstream capabilities in the IT value-chain. Once these subsidiaries gain the required capabilities in terms of consultancy, system integration, product design and application, development and maintenance, and others, they are merged into a major player. Merger has thus been one of the strategies to benchmark the company in terms of performance globally. If the strategy is to attain stability, then the alternatives could be internal stability or external stability. In some cases, both may be required. External stability can be attained by maintaining market share. Internal stability of a firm can be achieved through: a) Seeking production and marketing efficiencies, and b) Redefining the existing organisational structure. Strategy variations can attain the following forms: Internal or external Related or unrelated Horizontal or vertical Active or passive Each of these variations has different strategic alternatives considering the major goals of the organisation. For instance, internal strategy variation may be expansion, stability, retrenchment, or combinations. If expansion is decided upon, the alternatives could be to penetrate existing markets, add new products, or add new markets, and so on. Strategy variation is a global phenomenon. When the firm finds that it is not possible to fill a gap in the market with the existing strategy, it considers a change in the focus of the strategy. An example would be how multinationals Indianised their global strategies to woo their customers in Indian markets. . Possible Strategy variations Expansion Internal Stability Retrenchment Combination

Penetrate Seek Reduce costs; Subexisting markets; production reduce assets; contracting add new and drop products; products; add marketing drop markets; new products efficiencies; drop functions

External

Acquisitions; mergers

Related

Unrelated

Horizontal

Vertical Active

Passive

Seek synergy from new products, markets or functions Conglomerate diversification in products, markets or functions Add complementary products or markets Add new functions Innovative entrepreneurial moves Imitator in R&D Reactive products defence of position

reorganise Maintain market share Improve products

Disinvest SBUs; Crossliquidations; licensing, bankruptcies joint ventures Eliminate related products, markets or functions Eliminate unrelated products, markets or functions Eliminate complementary products or markets Reduce functions Grow to sell out

Table 1.2: Possible strategy variations Innovative practices HDFC introduced a high degree of innovation in its activities relating to customer friendliness, technology adaptation (by computerising operations), slashing loan processing time and so on. British Airways provided creative interactive video services on the new Boeing 777s for passengers to report to Customer Relations Depts. In-flight, order duty-free goods, get the latest news on business, fashion, etc.

Changing trends in strategies: Global setting to Indian setting

A keen insight into the strategies adopted by multi-national companies dealing in products such as automobiles, beverages, leather products, and so on, reveals the following shift from global strategies to Indianised strategies: Indianising positioning of products, i.e., positioning and advertising products in the Indian context, instead of maintaining a uniform brand image all over the world. Advertisements and brands are designed to appeal to Indian aspirations. For instance LG named one of its TVs as Sampoorna. Developing exclusive products rather than selling the same products globally. For instance, a made-for-India refrigerator is designed to serve just three basic purposes: chill drinking water, keep cooked food fresh and withstand long power cuts ( ELECTROLUX ) Coca-cola has redesigned its distributor-crates and trucks to suit Indian roads. Widening appeal to all segments of customers rather than focussing on select segments of the market ( REEBOK ). Operating through multi-brand stores rather than own distribution system. Entering market through small cars rather than with high-priced cars (HYUNDAI ). Undertaking manufacturing with locally made products rather than with imports ( HYUNDAI ). Using local film and sports personalities for advertising of premium brands ( OMEGA ) Offering free hand on investments to local managers, considering market size, rather than controlling country budgets ( PEPSI ). Agreeing to enter the market at any cost, sacrificing own terms, with scale of operations remaining a major attraction ( PEPSI ). Operating through local managers through more decentralisation, rather than deputing managers from the head office ( PEPSI ). Appointing an Indian CEO in place of an expatriate ( CARRIER AIRCON )

1.5.5 Selection of the Best Alternative The best alternative is one that can improve overall performance. Its selection depends upon: Particular configuration of objectives Environmental threat and opportunity profile Strategic advantage profile The generic strategy itself If a company has a higher growth as its objective, it is better to expand from a base of proven or time-tested competence (e.g. cost leadership or market leadership) and organise the departments to provide new opportunities while taking moderate risks. Every company must tailor an appropriate strategy for achieving its goals. The most generic types to initiate strategic thinking, as suggested by Michael Porter, are ( a ) Overall cost leadership, ( b ) Differentiation and ( c ) Focus. a) Overall cost leadership The company is said to achieve OCL when it offers its products or services at the lowest price ( due to its lowest cost ) among competitors, thus maintaining the largest market share. Companies which pursue this strategy have to sharply focus on costeffective strategies in all the areas pertaining to engineering, purchases, manufacturing and physical distribution. Any breakdown could cost the company very badly. A standby arrangement is vital. Mergers and take-overs reflect the common route for companies to optimise their resources and costs. HLL emerged stronger with the acquisition of Brook Bond. b) Differentiation The company should be capable of demonstrating a superior performance through its products and services. This should benefit a large number of customers in saving their resources in terms of time and money. Hero Honda could design its motorcycle differently to offer higher mileage. This resulted in savings to the user. The strategy is to differentiate the products and services sharply through quality in a market dumped with stocks. A photocopying company can demonstrate its excellence by minimising defects per thousand prints. Constant adaptation to changing technology and large-scale initiatives in R&D would provide a shot in the arm for the company. INFOSYS and WIPRO are some examples which have made a niche in the software industry through differentiation. c) Focus The company may concentrate on a narrow market segment and obtain full market information about it. It may pursue either overall cost leadership or differentiation strategy within that target segment. Such companies which pursue the same strategy to the same target market, are called a strategic group of companies. If they relentlessly pursue their strategies, they are bound to succeed, leading to benchmarking of strategies. The danger here is that others can copy in the name of benchmarks. This can be avoided by performing similar activities in an innovative and swift way, which the competitors cannot catch up with. There are certain issues which cannot be copied in the short run.

1.5.6 Strategic Choice

It involves the decision to select from among alternatives, the best strategy which effectively contributes to the business objectives. The spade work before making a strategic choice consists of: Identifying the few viable alternative courses of action. Considering the parameters for selection of best alternative. Evaluating each alternative on its own merits and in relation to other alternatives. Making the final choice. Keeping the next best alternative as stand by ( to take care of contingencies ) The following are the questions in terms of which environmental and internal conditions are analysed: What are the main business objectives? Does the selected strategy contribute to these objectives? What is the business definition is it product-based, market-based or function-based? Will it be achieved in the future? These questions help us to examine the performance gap between the expected and the ideal outcomes in relation to the alternatives under consideration. If the gap is narrow or negligible, the stability strategy is the best strategy, since it focuses on doing in the best way what we can do . Most international airlines lease out operations such as reservation, maintenance, ground halting work, and others to professional agencies to improve their overall performance in general and increase the pace of its own activities in particular. The focus will be on better implementation initiating certain pace changes internally. If the gap is large and significant, the probable alternatives are either to expand or to withdraw from unrelated areas. Mergers, acquisitions, disinvestments are some of the measures that initiate changes in the pace of growth. The decision-maker considers different choices closest to the present strategy. In the process, he identifies the most preferred strategy. Some of the parameters that help him in this process are: Is it politically acceptable or not? What is the degree of risk involved? To what extent is the enterprise dependent on external factors?

Such an evaluation leads to the choice of an appropriate strategy, and at this point, it appears to the decision-maker that the gap between the expected and the ideal outcomes is closed. Relying excessively on one corporate plan with one or two variations, more often, may not be adequate. Hence, it is desirable to keep a contingency plan ready as standby.

Strategy formulation and implementation

NOKIA studies closely each of the subsets of its customer segments. It carefully assesses what appeals to each of them most. After identifying their purchasing power, it chooses the appropriate technology and then formulates the strategy. When MOTOROLA could not take off with seven varieties of cell phones, NOKIA struck gold with just two plain models. The secret of success was that the products were changed or adapted to local conditions. In other words, the products and services were more Indianised to ensure survival in the Indian markets. NOKIA could successfully formulate its strategy around its different customer segments, varying appeals and affordable technology. TAPARIA, CEO of Rajashree Cements followed a value enhancement strategy to capture the market dominated by 43 grade, where ACC and L&T were market leaders. He noticed that nobody thought of the marketpositioning slot for superior grade 53, which, despite high price, leads to overall savings due to less consumption. He expected that a shift from 43 to 53 grade would require convincing, for which channel support and its participation in communication were essential. To popularise grade 53, Taparia launched the Shoppe concept by associating with weak and small channel members. The Shoppe concept empowered them with the services of a civil/structural engineer at Rajashrees cost for any type of consultation with the customers visiting the shoppe. The neat and clean environment of the cement outlets attracted the customers who were otherwise used to the dirty and dusty environment of cement outlets. The customers were assured of the availability and reliability of the quality products. The customer could avail the services of a civil engineer and also sit in an air-conditioned chamber of the Shoppe and watch a video film on grade 53. The quality of documentation (invoices, challans) was improved to create confidence in the customer. The success of the Shoppe concept was evident from a rise in demand from 5000 tonnes per month to 45,000 TpM in Pune alone. Even established giants like ACC and LandT had to follow his footsteps by introducing grade 53 and also developing their own exclusive outlets like ACC ki duniya and LandT station.

Since strategic choice is a managerial ( business ) decision, care should be taken that it is not affected by bias, intuition or politics. These constraints, if allowed to prevail, will limit the choice. Progressive companies hold formal meetings involving all or most of their managers at the top level while choosing strategy and to record the criteria used. More often, a company may not have total freedom in choosing the strategy as it is dependent for its survival on one or more of the following: owners, competitors, suppliers, the Government and the community. The strategic choice is also affected by relative volatility of the market sector wherein the firm chooses to operate. If the sector is more volatile, it needs a flexible and strategic response to be more effective. Strategic choice and its effectiveness is often restricted by various factors such as the strategies earlier followed, the attitudes of the managers to risk (most of the managers are averse to risk) and lobby for power (some managers wish to be close to the boss to garner influence) in the organisation, internal and external alliances, and so on. However, overall commitment to the chosen strategy is extremely important. 1.5.7 Allocation of Resources and Development of Organisational Structure The process of strategy implementation calls for an integrated set of choices and activities. These include allocating resources, organising, assigning appropriate authority to the key managers, setting policies and developing procedures. It is necessary to establish an operative system to reinforce, control and evaluate a strategy. A good strategy with effective implementation has a higher probability of success. There source allocation decisions, such as, which department is sanctioned how much of money and resources, in the name of the budget, and so on set the operative strategy of the firm. Budgets are formulated after a series of negotiations across different levels in the organisation. Budgets may be of different types: corporate budgets, capital budgets, departmental budgets, sales budgets, expense budgets, and others. An effective co-ordination and efficient division of labour requires an appropriate organisational structure. The best structure is one, which fits into the organisational environment. Also its internal characteristics should give rise to an effective strategy. Appropriate changes in the organisation structure may be initiated to ensure strategic implementation of the proposed strategy. Effective strategic management practices suggest that organisation structure should also change if the strategy changes or if the organisation experiences any bottlenecks in this regard
Q.2 Mr. Nandankumar wants to start a business of his own. He is seeking advice from a consultancy firm on how to go about it. If you were an employee of this consultancy firm, how would you guide him in preparing a business plan that would suit Nandankumars business?