PEST Analysis

PEST analysis stands for “Political, Economic, Social, and Technological analysis“. It is a framework for Strategic analysis of markets to evaluate macro-environmental factors used in the environmental scanning component. Some analysts add the Legal factors to the analysis.

Thus when the PEST analysis is expanded to incorporate legal and environmental factors; this is called a PESTLE analysis or a PESTEL analysis.

  • Political factors pertain to how the government intervenes in the economic functioning of the country (market) and more specifically how it affects the firm strategic decision making. Political factors such as tariffs, tax policy, labor laws, trade restrictions,environmental law, and political stability. Political stability is a major factor which affect the firm’s strategic decision making and overall legal framework.
  • Economic factors consists of interest rates, government bond rates, risk free rate of interest, economic growth, inflation rate (adjusted) and exchange rates.  These factors have major impacts on how a firm can operate in a market. Inflation rate and potential GDP affect the demand and prices of goods.
  • Social factors include the cultural dimensions of the population in which the firm will operate and include gender consciousness, gender based product/service bias, population growth rate, age spread, health consciousness, career attitudes and risk appetite of the target segment.
  • Technological factors consists of factors such as research and development focus in general industries, intellectual property protection laws, technology adoption rates, change assimilation culture, automation and the rate of technological change. They affect entry barriers, technology enabled products and service assimilation,  product prices, quality, and innovation.
  • Environmental factors consists of factors like ecological and environmental aspects such as forestry  and  climatic conditions which may especially affect industries such as tourism, farming, and insurance.
  • Legal factors focus on discrimination laws, intellectual property protection laws, labor laws, consumer laws, antitrust laws, employment laws, health laws, safety laws and social security laws which can affect how a firm operates, its bottom-line (cost structure) and the demand and distribution for its products and services.

The PEST framework has been recognized as an extremely popular framework for market analysis. It is a part of the external analysis conducted while demonstrating an in-depth strategic analysis during new market entry or doing market research for a new product launch or even sometimes during a product extension, and gives an overview of the different macroenvironmental factors that the company has to take into consideration. It is a useful theoretical tool for estimating market growth or decline, business position, potential and direction for operations.

It is an important complementary extension of the Marketing Mix strategies and often it is used as an alternative analytical tool for Porter’s 5 forces model (although not appropriate for the same).

What is Quality Research and a Good Research Paper

Often a question that plagues many a beginner research student is the major question: What is good research or How to write a good research paper. Often, this becomes a major headache for students striving to complete a dissertation for their masters programme or even their doctoral programme. So what are the dimensions of a high quality research or a high quality research paper that one needs to keep in mind while writing the same?

Typically, as I would go about it, a good research should follow a simple methodology which should transcend to a publishable good research paper. So here are the few basic steps which one should follow while writing a good research paper.

  1. First challenge is choosing the topic of the research. How does one identify what topic is actually a good topic of interest? A major point to ponder would be is the problem statement significant enough? How relevant is the context in the current scenario? If there is substantial past literature which has been already published, then it is likely that it is a good research topic, broadly. I would advise students who are yet to establish themselves in the academia to refrain from choosing topics which may be interesting, but would have very less literature to support the building blocks of the same.  Choose a title for your work, which brings out its essence within 5 to 12 (maximum 15) words.
  2. Research studies typically have 3 important dimensions: Applicability (relevance of the study to the outer world), Rigor of methodology (to allow replicability of the study and the findings and thus the falsifiability of the theory), and the generalizability of the findings/results/theory generated through the study. However, many senior researcher feel that it is difficult to address more than 2 of these dimensions stringently while conducting a research, without compromising the 3rd dimension.
  3. Next start with a thorough literature review in the area in which you are planning to do a study. Typically remember, most quality research papers would have more than 30-50 citations and these researchers would have gone through 3 times the number of cited literature while developing the study. Not only a detailed literature review clarifies what could be the possible contribution in the paper, but also will help you to get a very strong idea on what could be the possible ways to go about the research methodology for such a problem. While conducting a literature review, it is of paramount importance to validate the degree of authenticity of the sources based on which you would build your work.
  4. After a thorough review of literature is conducted, it is time to define the contribution of your study. Always remember, the best research works are often those which strive to make a small yet significantly clear contribution. Attempting a huge amount of contribution often affects the quality of the work.
  5. Next is the step of designing a research methodology.  Every research would be having an ideal methodology based on the focus of the study, the limitations of doing research in the problem domain and replicability of the methodology across other studies with a similar focus. typically research is often evaluated based on the methodological rigor with which the contributions are evaluated and subsequently highlighted.  However, due to practical reasons, one needs to remember that limitations of available resources like access to data, technology, connections and other factors often limit the scope of following a “tailor made research methodology” and this often is an inherent issue of the problem under investigation. Not all studies can follow the ideal path due to lack of resources available to travel on the same. However, research methodology is of paramount importance and care should be taken to ensure that the best possible methodology is undertaken while planning out the research design.
  6. Then comes the major question of going about with the planned methodology. In various studies, this phase would be different. Sometimes methodologies need to be modified from the one that was planned, in due course of progress in the study. In social sciences (business management, other social sciences) this would essentially be the data collection phase, while in the domain of technology, this may entail the development of algorithms/hardware to meet the objectives to extend existing theories. This is followed by the stage where the analysis is done (on the data collected, or through the new proposed algorithms or using new technology) and the results need to be rechecked with existing literature for their validity on how they concur yet extend the same. Every details in these steps should be noted so as to allow the replicability of the study by another research following your methodology on a similar problem.
  7. Finally the last question is how to go about writing a great dissertation paper. Ideally the paper should have few mandatory sections like a brief introduction to the topic highlighting its significance and what you contributed, and the boundaries of your study. Next important section is the detailed review of existing literature in the topic so as to be able to bring out the existing gaps in the same. Next important section is writing in details about the contribution of your research and compare the same with the existing literature, and highlighting what existing theories it takes forward or contradicts. Then comes the theory section where you should describe in details what is your main proposition (including the model) in the paper, by building on the blocks taken from existing literature. Then you should give a detailed explanation of your research methodology through which you attempted to provide empirical validation to your propositions in your study. Then you should discuss the results of the research after it is conducted. Finally in the conclusion section, you should discuss the significance of your propositions/findings and highlight how it concurs with existing body of knowledge and yet takes it further, or disagree with the existing body of knowledge, suggesting reasons for the the same. Some research papers would also like to end with few notes on the limitations of the study and future research directions for someone to extend your work.

Hope this helps all the students who are writing their dissertation paper. Do get back to me if you feel any important dimension which has been missed here, can be added back. Also, if you have any clarification, feel free to shoot them to me. Ph.D. with first class or equivalent at the preceding degree in the appropriate discipline. Research is an art which can only be guided by some professionals like PaperWritingHelp.net.

How to write a Resume or CV – Tips and Sample

The most important facet while applying for a job is presenting one’s competency through a resume or CV. So how should one present one’s CV so that the first barrier, of getting noticed amidst hundreds of applicants, is successfully crossed. Here are few tips every professional should keep in mind while writing the curriculum vitae. Always remember, the first round while selecting a candidate through the CV is via elimination, while the second round to finalize a hire is through selection via interviews. Continue reading “How to write a Resume or CV – Tips and Sample”

Business Negotiation – Tips to improve Skills

The Art of Negotiation

A ‘negotiation’ is a conversation between two or more parties where the outcome has yet to be decided. Many people enter ‘negotiations’ with a clear and defined outcome in mind and the intention to accept nothing less.  Making demands and negotiating are not interchangeable or even similar and you should be clear which activity you intend undertaking.

Most negotiations are stunted or hindered as both parties seek to gain advantage over the other.  These ‘aggressive’ exchanges often result in the focus becoming personal and subjective rather than impersonal and objective. Properly conducted, a ‘negotiation’ can be a very positive experience for all parties involved and not just during but long after the discussions are completed.

Every negotiation will result in one of 4 outcomes.

The objective of all parties conducting the negotiation would be to arrive at a Win-Win situation for both.

So How to play a Win-Win game?

Be Yourself.

People like to do business with people they can engage with and trust.  Make sure you’re open, honest and be very conscious of your non-verbal communications too. Sitting forward and encroaching could be seen as aggression; sitting back and slouching could be seen as disrespectful and flippant.  Avoid looking disinterested or resting your head on your hands.

Be attentive, sit up straight and maintain friendly, comfortable eye contact.  Use active listening skills such as nodding in agreement, making audible sounds of acknowledgement, gently imitate body language and speech rhythms and ask relevant questions.
If it’s appropriate, share some personal information.  Talking about family or interests could establish a rapport but be careful not to offend or alienate the other party with extreme views.

Never Lie
Don’t overstretch the truth; don’t over exaggerate and never ever lie!  You will be found out at some point and, when you are, all trust will be lost and you will never be in a position to negotiate again.

Be Present
Be present and in the moment, listening to everything that’s said and picking up on subtle verbal and non-verbal clues.  Use questioning to ensure you understand everything and don’t make assumptions. Understand fully your opposite number’s position – what are they proposing; what are they asking for; what do they want and not want; why they want it.

Establish Common Ground
Establish the common ground and then use this commonality to build on.  Where are the shared interests, goals, objectives?  How can you help them whilst also helping yourself?
This also affirms your positive listening skills, demonstrating that you’ve placed the wishes and desires of your opposite at the very centre of the conversation.

Show Respect
Show that you respect your opposite by taking some time to consider their views, desires and perspectives.  Dismiss nothing out of hand and be prepared to explain why you are rejecting something, giving them the opportunity to understand what matters to you.

Make your offer
Now you’re ready to make your offer and this should be based on your expectations but also on the preceding discussions reaffirming that you’ve been listening and that you’re trying to encompass your desires with your opposite’s. This is also the perfect time to discuss where you could negotiate further and what’s non-negotiable but it also helps to explain why some aspects are non-negotiable.  If you can’t move on price because of overheads, say so but explore where you could offset this (perhaps with reciprocal marketing or something mutually beneficial).
The ‘Art of Negotiation’ is quite simply getting a good deal for all parties involved or reaching a consensual agreement for mutual benefit.
Be careful not to compromise too much – this is a business transaction and whilst mutual respect, honesty and flexibility will aid the process, the outcome may be that the deal on offer isn’t for you and you walk away, happy that you’ve explored all options and haven’t betrayed yourself or your organization. That doesn’t mean you don’t respect each other, in fact quite the opposite – you respect yourself as much as you respect them.

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This article was authored by Collin Millar (Twitter @colin_millar), a guest blogger at Business Fundas.Colin is the Chairman of Chartered Management Institute (CMI, Glasgow), an EFQM Business Excellence Practitioner & Accredited Assessor.  Colin Graduated in Management from the Open University Business School and has held several senior positions including Head of Criminal Records Bureau for a Scottish Police Force and Head of Operations for a Scottish based charity.

Strategies for SAAS providers

Today, increasingly software providers are increasing the focus of selling information technology products as services. Thus there has been a spurt of adoption of SAAS (Software as a service) delivery models. However, switching to a SAAS delivery model requires the adoption of newer strategies, to maintain competitive advantage and sustained growth.

So what should be the major focus of entrepreneurial ventures offering technology services as SAAS?

A major success pointer for SAAS business model is pricing their services. Normally a company, which uses SAAS to provide any service should have a 2 tier pricing strategy, a part based on usage, and a fixed (normally initial setup costs). The focus of a SAAS provider should be to provide the benefits of economies of scale at both ends of potential stake-holders. So for a SAAS e-commerce provider, pricing is of key importance. A major successful pricing strategy would be one based on the value of the technology to the user, i.e. value based pricing strategies.

Next another major issue is reaching out to potential customers and then keeping them. Technology firms keep entry barriers through technology platforms, and so an e-commerce portal may continue using a company’s tech, even if it is higher priced, because costs of switching may be too high. The associated platform or hardware licensing issues may arise in cases of switching. Thus customers, once acquired, often are acquired for life, unless major customer dissatisfaction creates contingent situations.

Another major challenge for entrepreneurial ventures is moving forward in the PLC curve. While innovation is a must for information goods, there is a cost associated with development. However, once converted customers, are less likely to accept newer pricing strategies easily. Thus, conveying additive value of the new innovations to the customers becomes another challenge. Thus entrepreneurial ventures often start very successfully, but yet, flicker and die out, while attempting to move up the PLC curve.

Another major concern for entrepreneurial ventures arises from slow evolution of the multi-tenant architecture, which most SAAS providers use as a basic platform to deliver their service. Horizontal scaling strategies create a barrier to develop and adopt newer technologies and platforms that will provide increased operational benefits both for the client and service providers. Virtualization, while lowers cost, is essentially a barrier towards innovation, and thus the question whether multi-tenancy is necessary for SAAS delivery models is a major topic of controversy. This becomes even a bigger factor for entrepreneurial ventures with less deeper pockets.

Finally, another challenge for new service developers becomes protecting IPRs. Since the SAAS model ensures that there to a great extent of customization at the end of each client, the scope for differentiating and maintain the differentiation, is somewhat diluted by the intangible nature of services. Thus new innovations are often plagiarized by competitors and this really hits hard to new ventures. While developing IPRs increases cost (which often is a very sensitive issues in entrepreneurial ventures) , it should be understood it also protects the firm’s services from being plagiarized.

Do let us know if you feel there are more serious areas of concern for SAAS providers, in their focus to develop sustainable business strategies.

Values and Attitudes: a case study (2)

Our values are principles or beliefs that serve as guidelines to help us make decisions about actions, behaviors and life choices. They reflect what we value and how we feel about the rightness or wrongness of things. Attitudes are how values are manifested in our actions and thoughts to others. ATTITUDES are our feelings towards certain ideas and dictate how we react in concrete situations.

In this case study, we analyze the values and attitudes in Lagaan, the bollywood superhit movie of 2007. (Part 2)

Identifying Instrumental Values.

Bhuvan’s value of collectivism was in his accepting the challenge.Also Captain Russels individualism and superiority complex was portrayed when he decided to actually lay down the challenge to bhuvan, and this was clearly not appreciated by his superiors.The raja’s values of Dharma over Karma was expressed when he was asked to consume meat,in return of the favour asked.The collectivism of the villagers was expressed when they united to fight against the wrong that was being done towards them.The uncertainty avoiding values of the villagers were expressed when they did not want to tke up the challenge.Then Deva Singh Sodhi’s instrumental values came in the act in his joining the team,against his terminal values of fighting against the british.The values of the caste system became evident when bhuvan invited kachra to play,but eventually bhuvan managed to ignite the collectivism of the villagers. Collectivism was again portrayed when Lakha’s Individualistic act of betrayal became public. The values of winning,at the cost of ethical sportsmanship,was portrayed by the british players during the game.

Biographical Characteristics:

Age:  The impact of seniority has been seen throughout the film, especially in times when Bhuvan tries to speak in defiance of the british raj, but the senior villagers prevent him from doing so.When bhuvan actually first started to play the game, an incident occurs, when the ball moves towards gauri, and when she tries to give it back to him, she is ordered by her father to tend to household activities. Throughout the film, it is seen that the important positions in the village social architecture, like the mukhiya, is held by senior persons.It is not as if seniors do not let the juniors to speak out their perspectives and views, but the status of seniors still remains. In fact, there has been several occasions throughout the movie when the youth can actually make the senior citizens see reason although initially they were less inclined to do so. The age factor has been key in deciding the values of the individuals, with respect to their openness. The youth had been actually portrayed to be more upto the challenge, and ready for a change, while the seniors were not really ready to accept changes in their thought processes.

Gender:  It has been observed through out the film that feminine characters has been portrayed as those with feelings, and although the society of the village has been purely patriarchal in terms of holding the key positions like the mukhiya,women has been associated with  respectful persona that cared for the rest, and saw to it that the family needs were taken care of. They tended to the old, weak and the injured and sick people.It was especially illustrated when during game practice sessions gauri came with the meals for the players, and even coerced them to eat.During the practice sessions, when the players got bruised, under the guidance of Harikaka, they tended to the players. The behavior of Elizabeth has been a sharp contrast to that of her brother, who was arrogant and unkind, to the core and expressed masculinity.

Caste: Caste system was prevalent in those days, and that also took a centre stage in the later half of the movie when Bhuvan invited kachra to play in his team. Kachra was referred to as being untouchable or “Achut” and the rest of the team initially was very adamant about leaving him out of the team. It took the inspirational character of Bhuvan to actually convince the villagers to move away from the caste bias and play unitedly and portray collectivism.

Race: A scene flashes to the inner eye is when throughout the movie, the Indian villagers were mistreated by the british raj as being native and insults were hurled at them at random and they were severely penalized even for small “mistakes”. The Indian villagers were shown to be beaten up, and Captain Russel went to the extent of saying that the natives would for ever live under the soles of the britishers. This shows the complete disregard of the human being and the racist feelings and attitudes that took centrestage when the plot of the movie unfolded. Even the british loyalists were not free from insults, and towards the end of the match, it was seen that even the most loyal Ramprasad revolted due to the constant differential behavior that was meted out to him on a regular basis.
Our values are principles or beliefs that serve as guidelines to help us make decisions about actions, behaviours and life choices. They reflect what we value and how we feel about the rightness or wrongness of things.

 

Values and Attitudes : A case study (1)

Our values are principles or beliefs that serve as guidelines to help us make decisions about actions, behaviors and life choices. They reflect what we value and how we feel about the rightness or wrongness of things. Attitudes are how values are manifested in our actions and thoughts to others. ATTITUDES are our feelings towards certain ideas and dictate how we react in concrete situations.

In this case study, we analyze the values and attitudes in Lagaan, the bollywood superhit movie of 2007.

First, an understanding of the needs pyramid is essential for further appreciation of the case analysis.

The need pyramid typically drives the values and attributes of individuals. The characters  of lagaan are also not free from the effects of this hierarchy of needs, first hypothesized by Maslow.

Values and Attitudes: The Flow in Lagaan.

The attitudes in the movie become evident when an argument starts between goli and bhura, reflecting their affection for their children and poultry respectively.Then gauri professes negative affective attitude towards Lakha.The oncoming clouds spark behavioral and affective attitude driven actions amongst the villagers starting a celebration.Then the behavioral component of bhuvan’s towards the british player become evident at the first british-villagers meet.Then the villagers expressed negative cognitive attitude towards bhuvan’s acceptance of the challenge although gauri and his mother showed a positive cognitive attitude.Then the villagers showed an affective attitude when bhuvan’s first shot hit the temple bell.The value to stand by a villager, if threatened by external forces became evident, when bhuvan was then attacked by the other village. Elizabeth portrayed the value for equality of chances when she decided to help the villagers understand the game. Then Ismail’s cognitive attitude became evident on seeing the “gori mem” assisting bhuvan.The instrumental value of deva singh sodhi when he came to play, as against his terminal value of “war” against the britishers.Then the affective value of elizabeth gets portrayed as she confesses to bhuvan,she loved him.Similarly, bhuvan professes his love to gauri.Bhuvan’s behavioral component of equality got reflected when he invited kachra to play in the team,against the negative cognitive attitude of the villagers,which he later managed to change.On the D-Day the affctive attitude of the raja against the british became evident.Then when the villagers came to know about Lakha’s betrayal, their cognitive and affective attitude became evident.The positive cognitive attitude of the british officers towards the village team’s performance,became evident when the game was in progress.During the game, the cognitive,affective and behavioral attitudes of bhuvan’s team became evident,towards the tactics of the Britishers and their own reactions.Finally, the display of affective attitude when the village team won the match.

Transformation of Attitudes.

Initially the villagers were very hesitant in supporting bhuvan,but the first shot of bhuvan rang the temple bell changed their veiw,which continued seeing the constant enthusiasm of bhuvan and the support from the “gori mem”.Slowly bhuvan’s self belief and enthusiasm was infused among the villagers.Gauri and bhuvan’s mother was always there to support bhuvan from the very beginning,although in the patriarchal society,they did not have too much say.The support from the “gori mem” was instrumental in arising the feelings of the villagers to stand up against being wronged.Amidst  all this positive changes of attitude, the negative changes in Lakha was striking,when his attentions toards gauri was neglected,who in turn only cared for bhuvan,and this caused him to betray his fellowmen to Captain Russel.In the midst of all the challenges,the villagers became a family,leaving aside their initial values for inequality on the basis of caste,and seniority on the basis of age.Then the game started amidst the emotionally charged atmosphere.Then the villagers came to know about Lakha’s betrayal, and although they initially reaction threatened his life,later on bhuvan’s insistence and lakha’s apology,he was given the chance to prove his loyalty, which he did.Then came the real emotional outburst when the village team won the match thus completing the transformation.

Am I SICK?

Is the title giving a blow!! You must be thinking what is this!! “Am I SICK?” No, I am fit and fine. Who says I am sick !! Whoever is telling, he is sick!! And why I will be!! –No Not All.— I know this is what is going on in your mind – am I right!!

 

Let’s give some time for ourselves. Let’s realize ourselves. Let’s give a blow in our inner mind- let’s give a shock in our everyday behavior. I am telling you- you will find yourself in ICU. Shocked !! I know you are. But this is a bitter truth.

Trust me- find out some time for analysis. See who you are, what you are doing, how you are doing and for whom you are doing. Are you actually working!! Working hardly or smartly!! Or just running after money. Dream is big money- big house- costly car; A luxury life. If you are already enjoying- still you want more!! Right!! And if you are a struggler or gradually making your career- still dream remains the same. Going through the same rat-race. Right! Have you ever though to find five minutes for the needy person standing beside you! Have you ever extended your hand when you saw a blind person struggling to find his way on the road where you just passed him giving a veered look? Have you ever gone to help the person who just met with an accident!! Probably No. And if at all your friend suggested going, you said No No!! This can be a police case!! So let us be safe and keep ourselves away. I know you are remembering when you did that. Probably you thought to go but your friend suggested the same. Right!! Have you ever thought to just get up from the seat and let the old person sit there –who is just standing beside you!! You are just happy that somehow you managed a seat. Good if you have done. But probably you will find the answer ‘No’ if you ask yourself.

You must be thinking – how does these make a difference in your life. Your life is cool- and it will be as cool as it is. Right!! You are absolutely right. And if you are thinking in this way- you can’t be blamed for this. Because the value system you are in or the value system you are inculcating into your  next generation – this is quite natural. You don’t have time. But think once. Instead of the person met with an accident; you have met with the same accident! And people are reacting in the same manner and you are just   lying-down  helplessly on the road. How will you feel!! Good !! !! No ; right!! You will expect help from the persons probably whom you did not help when they required oneday!! Right!! If everybody will think the way you think- then imagine what will be your situation on the road after your accident. But do you think that you were not capable of helping the person. Were you sick that day!! You were too sick to talk with the person or hold the hand of that blind person!! No !! But Yes – I will say- you were SICK. Mentally you were SICK. Otherwise a healthy and Ok mind would have instructed you the right thing. Your mind would not have stopped you from helping. Or your mind would not have stay untouched in spite of seeing the blood-stained person lying on the road. It clearly shows that we are fine, but our mind is not. It’s not well. It’s SICK.

 

Find some time to think. Think – are you doing right!! Think are you inculcating the right value into your kids!! Because if you are giving such value to your child – definitely when you will require help, the person who will be standing beside you probably with the same value like your kid- will not help- because they never realized this thought.

It’s never a late. Beginning of anything is good. Let’s think and start realizing. Let’s start making a difference. Let us take our society towards a better one- a cultured- value added healthy and humane society.

Brief Profile of Author : Amitava Pal is a Software Engineer and XLRI Alumni. His special areas of interests are Human Psychology and Soft Skills. He has been writing papers since 2005 and the papers have already been published in India and Abroad like University of California, Bonn University Germany and so on. He is currently writing a book on “Typical Human Psyche on Differential Behaviour”.

Top Ranked Engineering Colleges in India

The ranks of the top engineering colleges are out again. This time this is on the basis of a study conducted by Careers and published on Yahoo. While most of the rankings appear genuine, this list is very crucial for all the engineers wanna-be-s who are scouring for a college where they can kick start their professional career as an engineer.  While as always the ranks in the top are heavily dominated by government colleges and institutes like the IITs, Jadavpur University, IT-BHU, the BITs and the NITs, the top-50 listing is a roll call of excellence India’s top 50 engineering institutions in 2011.

A balanced scorecard methodology was used to cluster the top ranked institutes (colleges and universities) after checking the last five year rankings of about 241 colleges and normalizing heir ranks, by assigning differential weights to subjective and objective ranking criteria, as is the standard in such studies. Such a process has been used to develop clusters of institutions which have similar performance against those criteria.

So before jumping into where you may be targeting, while joining up for your graduate course in engineering, do check out this list. For where you pass out from not only affects how well you learn your discipline, but also the kind of career track you can expect after passing out of the hallowed portals of your Alma Mater.

Value Creation Strategy – Business Model

To create sustainable, long-term value for all the stakeholders of a firm, it is important to explicitly establish an appropriate stakeholder value target. However what would constitute the “success” condition for all the stakeholders of a firm would vary from the goals of individual stakeholder. For an investor in a firm, value may be seen as through higher market price of his stocks and bonds, where as, for a mid level worker, value may mean better returns in terms of satisfaction from the job, maybe in terms of pay grade improvements or in terms of job satisfaction. Although, what constitutes “value creation” may be dependent on stakeholder perception, for a generic strategic framework, there is a need to conceptualize a generic framework to achieve a target so the value may be created for the firm as a whole, in strict strategic sense.

The key to reach this target and achieve a sustainable competitive advantage is the alignment of business strategy, financial strategy, technology strategy, marketing strategy and investor strategies. One such model developed in strategic management literature is that of Strategy Maps.

In Strategic Maps framework, value is created through 3 main organizational resources, namely Human Capital, Information capital and Organization Capital.

As depicted in this model, value for a firm is essentially created through the interaction of  four processes, namely, “Operations management processes“, “Customer relationship management processes“, “Innovation processes” and “Regulatory and Social processes“. Under each process, there are lots of transaction level processes which create value. Monitoring and strategizing on the value creation of  transaction level processes is the functionality of Mid Level management in the organization which may be termed as “Ploy for Value Creation“. Focus here could be “Ploys” for improving cost structure or improving asset utilization within the firm. The objective at this level is to focus on productivity enhancing strategies.

For the executive senior management, strategy formulation for the purpose of “Value creation” would have a different focus. Their objective could be to expand the revenue opportunities through entering a new marketdecide a growth strategy for a product or market, or focus on Business Diversification strategies. In short, the role of the executives would be to evaluate various growth strategies for the firm, which could lead to huge revenues and thus economic value creation in the near future, upon realization of the plan post implementation of the strategy.

There are many other strategic frameworks for the creation of value for businesses which have their individual merits and limitations.  Another popular framework for value creation is that of Prahlad et al. (2004)

Do let us know if you have any query.

Market Entry Strategy for International Business

An international market entry strategy is defined as the planning and implementation of delivering goods or services to a new target international market. It often requires establishing and further managing contracts in a new foreign country. Few firms successfully operate their business in a niche market without ever planning to expand into new markets (mostly due to the localized nature of their Business) but most firms strive to expand through increased sales, brand awareness and business stability by entering a new market. Developing a win-win market entry strategy involves a thorough analysis of  multiple factors, in a planned sequential manner.

Continue reading “Market Entry Strategy for International Business”

Ansoff Matrix

The Ansoff Growth matrix is a tool that helps firms decide their product and market growth strategy based on objective analysis of industry structure and product type. It is one of the more popular tools for strategic management analysis, in the scenario of deciding the case for a related diversification of businesses and firms, which itself is a highly risky strategic decision. Continue reading “Ansoff Matrix”