Dhaval K.Toprani (CA-IPCC Student) (1150 Points)
Replied 17 February 2011

Business Environment

1. What is Business?
In simple words,being busy in activities is called business..bole to..activities connected with production,purchase and sale of goods and services for the purpose of profit making is called business.

2. Objectives of Business
Profitability

This is an important but not the only objective of business. We normally set-up business to achieve profits but it’s not be done at the cost of rules and regulations. Corporate social activity is an important function of all organizations. Sports View- Formula 1 mein sabko 1st aana hai toh overtaking karenge...arey par aisi overtaking bhi nahi karni chahiye jaha pe bada accident ho jaaye ya dusre driver ko chot lag jaaye...

Survival

Hume lambi race ka ghoda hona chahiye. Jab bhi soccho long-term soccho aur aisa koi kam na karo jisse abhi toh profit ho par baad mein survival pe hi khatra ho jaaye. So survival is the basic objective of business organizations. It has more importance during initial stage of set-up and economic adversity. Iska matlab aap market mein A/c's ke naye teacher ho toh pehle toh aap survive karna chahoge aur baad mein kamayi.Aise hi koi particular sector doob raha hai toh sabse imp. survival ho jaata hai. Survival hi nature of ownership and competence of management batata hai. Par ab survival se aage sochte hai kyunki ye akela objective nahin hai...Sports View-Test match ka last day..90 overs to play...200 runs ka target aur 4 wicket haath mein...target ko dekho bhi mat...sirf wicket bachao..survive....

Stability

It is a cautious and a conservative approach. Har kadam fook-fook kar rakhna hai. It is the strategy of least resistance in a hostile environment. Isme company apna SWOT analysis karti hai.

It is the least expensive and risky objective in terms of managerial time and talent. Isse tumhe tension kam rahegi. Isme company apne existing customers ko hi sambhalna chahegi. For e.g. Ek CA aur koi nayi field mein practice na karke apne existing clients ko sambhalne ke liye un par hi concentrate karein. Isme maximum Customer and employee satisfaction hoga. Ye dynamic nature of environment ko bhi sambhal lega...Dravid ki test innings...no hurry no worry...
Efficiency

We try to achieve the best in our field. Efficiency in terms of Labour productivity, energy consumption and quality control. Kam kharcha karke best quality ka maal banana hi efficiency hai...Team ke all rounders...ek player mein do ka faayda..

Growth

Profit bade, Revenue bade , Production , Employees and prosperity. It is equated with dynamism, promise and success. Assets bad gaye, better manufacturing. facilities, better market share ya acquisition of other enterprise. Par isme risk aur promise dono hai...F1 ki Force India team...

3.What is Business Environment?
The forces-inner and outer which affects the business in any way constitute the environment.Everything that affects the business is a part of the environment...!!
Characteristics of Business Environment are:
Complexity

All these factors don’t exist in isolation but interact with each other to create a different influence. Due to large no. of factors, it becomes difficult to understand which factors constitute a given environment.Hum env. ko in parts toh samajh sakte hai par uske saare factors ko totality mein samajh pana mushkil hai...

Dynamic
Due to large and variety of influences operating, there is dynamism in the environment.Buss. env. changes continuously due to changing needs and demands of customers E.g. Mobile aane se pager scrap ban gaye
Multi-faceted
A particular change in environment can be seen or judged or analysed from different angles by different observers.As lovely said that diff. people take changes differently so for some people the change is opportunity and for others it is threat. E.g. Aap apne office ko computerised karoge toh agar koi 50-55 years ka aadmi isse comfortable nahin hoga aur usse threat lagega ki kya musibat sir pe padh gayi wahin young aadmi khush hoga ki chalo accha hai ki paper work kam hoga.
From the sports view the concept of Umpire Decision Review has been widely accepted by the cricketing nations except for a few like India...BCCI ko lagta hai ki is UDRS se team ko disadvantage hai..on the other hand most of the other teams have looked upon it as an advantage...
Far reaching impact
Minute changes in the environment can bring a big change in business as the growth and stability of the organisation largely depends on the environment it exists in.

4. Macro and Micro Environment
Macro Environment
Economic View

Yaar market , region ya country jisme humari

company deal kar rahi hai uska economic environment bahut important hota hai. It means Money, Manpower, Material, Value chain & supply chain of region. These effects supply of inputs to enterprise, their cost, quality, availability and reliability
Technology

Logo mein latest technology ka craze hai. Internet ne toh sab change kar diya hai. Iski wajah se kayi naye business aa gaye hai aur kafi ka band baj gaya hai. Toh technological change ka analysis karo. Kya opportunity hai, kya risk hoga aur role of R&D. Ex. Dell computers apna inventory mgnt computerised kar diya hai yaani less paper work..

Other factors
Population Demographic, Social value, Other factors like legal changes , Foreign policy changes , Life style & Govt.
Short form
E
P
S
O
F
L
G
TECHNOLOGY
Micro Environment
Customers

Basic aim of business is to create and retain customers. Graahak bhagwaan hota hai .right?

Must know:

Who are the customers?
What benefits are they looking for?
What are their buying patterns !!!!!!!!!!

Organisation

Self analydsis of organisation is the most important thing. organisation must know its vision, mission, objective, goal, and above all, its TRIGGERS and DRIVING FORCE.

Market

Jang-e -maidaan ..........Some important issues in market study:

Cost structure of market
Price senstivity of market
technological structure of market
Existing distribution system in market
is market mature? matlab ready for marketing!

Intermediaries

It influences business in great quantum. Customers ke saath connection intermediaries hi karwaate hain !!! Example : Big bazaar!!!

Competitors

Competitors wo sabhi dusri business entities hai jo compete karte hai for resources and market stake!!

Competitors shape business!!
Some question while analysing competitors are:

Who are the competitors?
What’s their present and future strategy and their business objective?
Who are the MOST AGGRESSIVE & Powerful Competitors?

6.Suppliers:
They provide raw material, equipment and different services.Suppliers play a crucial role in the business environment too...An organisation's working largely depends on how efficient its suppliers are...abhi tumne toh order leke rakh diya lekin supplier ne raw materials hi time pe nahi bheje toh tum customer ko kya doge..Suppliers also have their own bargaining power...Achanak se usne price bada diya toh aapko ya toh margin kam karna padega ya khud ke prices bhi badhane padenge...

Index of Inputs
Sneha
Pulkit
Lovely
Dhaval

9 Like

BALASUBRAMANYA B N (CCI STUDENT....) (44668 Points)
Replied 17 February 2011

GREAT WORK....GOOD GOING....

Sneha - SHINING STAR OF CCI / NT OF CCI
Pulkit- CCI WRITER / NT OF CCI
Lovely- NEW TALENDTED OF CCI
Dhaval- NEW TALENTED OF CCI

3 Like

(Guest)

GREAT WORK....GOOD GOING....

Sneha - SHINING STAR OF CCI

Dhaval K.Toprani (CA-IPCC Student) (1150 Points)
Replied 17 February 2011

Business Policy and Strategic Management
Hmm...policy matlab koi bhi principle jis pe hum ek course of action set karte hai..ab use business mein use karo toh ban jaati hai business policy jisme ye nahi batana hai ki koi situation mein kya karna hai ya koi cheez kaise karni hai..agar wohi bata denge toh managers khud kya sochenge..par fir managers zyaada sochne lage toh bhi problem..toh ye business policy woh manager ki limit set kar degi..jaise iske aage soch na mat...aur limits mein reh kar firm ka bhala karna hai..The Christensen definition explains it pretty well too.
History/origin ye sab explain karne ka koi point nahi banta....jab business policy use karna start kiya toh sabko accha laga par woh pehle ki baat ho gayi...aaj ke time mein duniya 24 ghanto mein ek baar nahi ghumti..ek din mein 24 baar ghumti hai...toh ye sab fix nahi rakh sakte..constantly apne business ko dekhna padhta hai uske saath surroundings ko dekhna padhta hai aur business aur surroundings ke relationship pe nayi STRATEGIES plan karni padhti hai jis se company peeche na reh jaaye...Staying up with the time as we call it...
So Features of Business Policy are

GUIDELINES for achieving predetermined goals and objectives
Can be VERBAL or WRITTEN
Developed on the basis of the organisation's RESOURCES and CAPABILITIES
Draw the SCOPE OF DECISION MAKING
DYNAMIC in nature
Generally MEANT for SUB-ORDINATES
Can be developed for WHOLE organisation or SEPARATELY for each functional area

Policy ka matlab set of rules. Yeh rules applicable hoonge on different functions of business like Marketing, finance, HR or Production. Jo bhi Management inn fuctions se related hai Buss. policy unka scope decide karegi. Jis bhi Area mein lagegi ye uss area ki Buss. policy ho jayegi. In short it presents a framework for understanding Strategic Decision Making.
It provides a systematic approach to deal with day-to-day and long-term Buss. situation.
To start with the process of strategic planning an organisation must define its vision n mission statements in a consolidated and articulate manner. Failing which an enterprise often fumble at cashing in the available opportunities and make inappropriate choices of strategies n refers to determining the direction where the organisation is headed. it relate to efforts taken to modify customer-product-technology-market focus to elevate the company's position in current market scenario..

STRATEGY AND SM

Strategy is basically emerged from military. Enemies ko defeat karne ke liye jo method hote the vo Strategy the. Ab enemy ko apne competitor se replace kar do. Usse defeat karna yani uspe STRATEGIC ADVANTAGE lene ke liye jo plan banaoge vo strategy hai.
Enemy ya rival ko defeat karne ka Buss. mein matlab hota hai apne customers ko please karna, apne objectives ko poora karna aur uske liye jo bhi competitive moves ya approach loge vo Strategy hai.
Acc. to Chandler, ' Strategy is the determination of basic long-term objectives and goals of an enterprise and adoption of course of action and allocation of resources necessary to carry out these goals.
Business ka environment bahut dynamic i.e. change hone wala hai. Isliye uske according organisation ke objective set karo aur course of action ko determine karo unhe achieve karne ke liye.
Some main char. of it are:-
* Strategy is formulated by top mgmt.
*It is meant for long-term growth
*Integrated - It considers all the elements of buss.
*Flexible - change ho sakti ho circumtance ke according
*Action oriented- Sir plan hi nahi apply bhi karo
*Purposeful, Efficient , Goal oriented honi chahiye
The Generic Strategies
(i) Stability strategies: One of the important goals of a business enterprise is stability to
safeguard its existing interests and strengths, to pursue well established and tested
objectives, to continue in the chosen business path, to maintain operational efficiency on
a sustained basis, to consolidate the commanding position already reached, and to
optimise returns on the resources committed in the business. In short jo jaisa chal raha hai chalne do....
(ii) Expansion Strategy: Expansion strategy is implemented by redefining the business by
adding the scope of business substantially increasing the efforts of the current business.
Expansion is a promising and popular strategy that tends to be equated with dynamism,
vigor, promise and success. It is often characterised by significant reformulation of goals
and directions, major initiatives and moves involving investments, exploration and
onslaught into new products, new technology and new markets, innovative decisions and
action programmes and so on. Expansion include diversifying, acquiring and merging
businesses.Chale chalo aage badte chalo apni raftaar badhate chalo
(iii) Retrenchment Strategy: A business organisation can redefine its business by divesting
a major product line or market. Retrenchment or retreat becomes necessary or expedient
for coping with particularly hostile and adverse situations in the environment and when
any other strategy is likely to be suicidal. In business parlance also, retreat is not always
a bad proposition to save the enterprise's vital interests, to minimise the adverse
environmental effects, or even to regroup and recoup the resources before a fresh
assault and ascent on the growth ladder is launched.Ruk jaana nahi tu kahi haar ke...thoda slow ho jaao par chalte chalo
(iv) Combination Strategies: Stability, expansion or retrenchment strategies are not
mutually exclusive. It is possible to adopt a mix to suit particular situations. An enterprise
may seek stability in some areas of activity, expansion in some and retrenchment in the
others. Retrenchment of ailing products followed by stability and capped by expansion in
some situations may be thought of. For some organisations, a strategy by diversification
and/or acquisition may call for a retrenchment in some obsolete product lines, production
facilities and plant locations.Thoda left,Thoda right bas ho gaya perfect ab aage chalo
Vision and Mission Statements
"GREAT VISIONARY CAN FORSEE THE FUTURE IN ADVANCE AND TAKE STEPS ACCORDINGLY TO BE A T FOREFRONT"
Vision provide a road map to Company's future. Future dekho aur decide karo ki aap future mein apni CO. ko kahan dekhna chahte ho. Co. ki intention kya hai, future mein uska technology change pe kya response ho, kya nayi cheez vo adopt karegi.
* It clearly provides the direction that Co. wants to follow.
*Identify the need of changing from existing direction or products.
*Create passionate env. in the organization to move Co. with gr8 excitement in selected direction and promote Entrepreneurship .
Mission statement forms the base of Company's Vision. It answers to the question " Who we are and where we are now"?
MISSION statement forms the basis of for future orientation or direction of Company.
Features of Mission :-
* It answers to the question , " Who we are and what we do". So it focus on organisations present capabilities , focus activities and Buss. make-up (Aap kar kya rahe ho)
*It is expression of company vision. It provides a guiding principle and common purpose to each member of organization.
Mission of McKinsley & Co. "To help Buss. Corporation and govt. to be more successful"
Mission of Govt. of India
"Make India a Developed Nation by 2050" and "Electricity to all by 2012"
It should to best worded, crisp and clearly indicating the aims and aspirations of the co. Also should reflect the philosophy and the principles for which the co. would like to be known for...
LEVELS OF STRATEGY

It is believed that strategic decision making is the responsibility of top management. However, it is considered useful to distinguish between the levels of operation of the strategy.

Strategy operates at different levels viz-à-viz:

Corporate level
Business level
Functional level

There are basically two categories of companies; one, which have different businesses organized as different directions or product groups known as profit centres or strategic business units (SBUs) and other, which consists of companies which are single product companies. Eg. Reliance Industries and Ashok Leyland Limited.

The SBU concept was introduced by General Electric Company (GEC) of USA to manage product business. The fundamental concept in the SBU is the identification of dicrete independent product/market segments served by the organization. Because of the different environments served by each product, a SBU is created for each independent product/segment. Each and every SBU is different from another SBU due to the distinct business areas (DBAs) it is serving.

Each SBU has a clearly defined product/market segment and strategy. It develops its strategy according to its own capabilities and needs with overall organizations capabilities and needs. Each SBU allocates resources according to its individual requirements for the achievement of organizational objectives. As against the multi product organizations, the single product organizations have single strategic business unit. In these organizations, corporate level strategy serves the whole business. The strategy is implanted at the next lower level by functional strategies. In multiple product company, a strategy is formulated for each SBU (known as business level strategy) and such strategies lie between corporate and functional level strategies.

The three levels of strategy are explained as follows;

Corporate level strategy:

At the corporate level, strategies are formulated according to organization wise policies. These are value oriented, conceptual and less concrete than decisions at the other two levels. These are characterized by greater risk, cost and profit potential as well as flexibility. Mostly, corporate level strategies are futuristic, innovative and pervasive in nature. They occupy the highest level of strategic decision making and cover the actions dealing with the objectives of the organization. Such decision are made by top management of the firm. The examples of such strategies include acquisition strategies, diversification, structural redesigning, etc. The board of directors and chief executive officer are the primary groups involved in this level of strategy making. In small and family owned businesses, the entrepreneur is both the general manager and the chief strategic manager

Business Level Strategy:

The strategies formulated by each SBU to make best use of its resources given the environment it faces, come under the gamut of business level strategies. At such a level, strategy is a comprehensive plan providing objectives for SBUs, allocation of resources among functional areas and coordination between them for achievement of corporate level objectives. These strategies operate within the overall organizational strategies i.e within the broad constraints and policies and long term objectives set by the corporate strategy. The SBU managers are involved in this level of strategy. The strategies are related with a unit within the organization. The SBU operates within the defined scope of operations by the corporate level strategy and is limited by the assignment of resources by the corporate level. However, corporate strategy is not the sum total of business strategies of the organization. Business strategy relates with the “how” and the corporate strategy relates with the “what”. Business strategy defines the choice of product or service and market of individual business within the firm. The corporate strategy has impact on business strategy.

Functional level Strategy:

This strategy relates to single functional operation and the activities involved therein. This level is at the operating end of the organization. The decisions at this level within the organization are described as tactical. The strategies are concerned with how different functions of the enterprise like marketing, finance, manufacturing, etc contribute to the strategy of other levels. Functional strategy deals with a relatively restricted plan providing objectives for specific function, allocation of resources among different operations within the functional area and coordination between them for achievement of SBU and corporate level objectives

Sometimes a fourth level of strategy also exists. This level is known as the operating level. It comes below the functional level strategy and involves actions relating to various sub functions of the major function. For example, the functional level strategy of marketing function is divided into operating levels such as marketing research, sales promotion, etc

The three levels of strategies have different characterstics as shown below;

Dimensions	Levels
	Corporate	Business	Functional
Impact	Significant	Major	Insignificant
Risk Involved	High	Medium	Low
Profit potential	High	Medium	Low
Time Horizon	Long	Medium	Low
Flexibility	High	Medium	Low
Adaptability	Insignificant	Medium	Significant

Index of Inputs

Tanmayee
Pulkit
Dhaval

Bhavin Pathak (Self-employed) (4772 Points)
Replied 17 February 2011

arre bhai maine jo Income Tax ke charts banaye woh bhi rakh de yaha sab ko benefit hoiga...

Sunshine (Helping All) (10575 Points)
Replied 17 February 2011

thanx Dhaval sir!!!...its very useful..........

1 Like

Dhaval K.Toprani (CA-IPCC Student) (1150 Points)
Replied 17 February 2011

ha daal dunga...compilation hi kar raha hun sab discussions ka

1 Like

Dhaval K.Toprani (CA-IPCC Student) (1150 Points)
Replied 17 February 2011

Miss SM..aap hume sir kahe ye accha nahi lagta...

CA Ravi Sisodia (CA,CS,CMA) (32226 Points)
Replied 17 February 2011

What a concept ************** great !!!!!!!!!

1 Like

Dhaval K.Toprani (CA-IPCC Student) (1150 Points)
Replied 17 February 2011

Strategic Analyses
What is Analysis?
Analysis means scanning i.e. study karna. Analysis kiska ??
Environment ka - Both internal & external. It acts as a stepping stone in crafting the overall strategy of organization. Detailed view of Industry, Competitors , organizations, strength & weakness.

Why is Strategic analysis necessary?

Coz it helps in knowing mission
helps in forming the vision.
helps in setting the objective.
helps in crafting the goal.
IT sets a benchmarks and process to fill up the gap.

Situational Analysis
Situational Analysis means Env. analysis. It involves detailed analysis of external as well as internal env. and based upon organization's situation or position with respect to env. provides the choice for strategy formulations.
different elements co. must consider before analysis of situation:
1.Product Situation
2.Distribution situation
3.environmental situation
4.competitive situation
5. opportunity situation

1. Product Situation
whats ur

current product?
core product?
secondary product?

2.Distribution Situation
Analysing the distribution channels, methods ki kis tarah se apne product ko market me laaye aur zyada se zyada masses tak reachable ho..

3. Environment situation
Evaluating both internal & external environment ..

4.Competitive situation

hamare competitors kaun hai?
their strategies
wat they think of themselves
and wats your competitive advantage

5. opportunity and issue analysis

listing down the wishes
focusing on available opportunities
focus on strength on which business can rely upon and can bring some major changes in business.

Industry and competitive analysis features

Dominant Economic Feature of Industry
It analyses the key economic industry traits such as :-
Market Size
No. of Competitors
Scope of Competition (local,regional,national or global)
Customers
Life cycle of product
Distribution channel
Location of Industry
Capital requirement

Nature and strength of Competition
Intensity of competition. Analyses of different forces of competition and how strong is each force. For e.g. Telecom sector . Porter's Five forces model is used for it's analysis.

Identifying Co. in strongest and weakest position
Co. pose competition to each oder on many variables like price, after sale service & product range etc. To analyze such competition Strategic Group Mapping is used. Here Co. with similar competitive approach and position in market are placed into same strategic group. From such grps it can analyze it's position

TRIGGERS OF CHANGE:
All industries are characterized by trends and new developments that gradually produce major changes which require a strategic response from participating firms. The product about industries life cycle helps in explaining industry change but is still incomplete. There are more causes of industry change than an industry's position in the life cycle. THEY ARE KNOWN AS DRIVING FORCES.
DRIVING FORCES:
while it is important to judge what growth stage an industry is in , there's more analytical value in identifying the specific factors causing fundamental industry and competitive conditions change because there are dynamic forces that create pressures for changes. The most dominant forces are called driving forces because they have the biggest influence on what kinds of changes will take place in the industry's structure and competitive environment.
Analysing driving force has two steps: identifying what the driving forces are and assessing the impact they will have on the industry .
THE MOST COMMON DRIVING FORCES ARE AS UNDER:
many events can affect an industry powerfully enough to qualify as driving forces. Some of the categories of drivers are as follow:

the internet and the new e-commerce opportunities and threats it breeds in the industry.
increasing globalization.
changes in the long-term industry growth rate.
product innovation.
marketing innovation.
entry or exit of major firms.
diffusion of technical know-how across more companies and more countries.
changes in cost and efficiency.

Likely Strategic Moves of Rivals
Apne rivals ke move pe dhyaan rakho. Hum jab tak unke actions ko monitor nahi karenge unhe hara nahin saktre. Unke moves ka anticipation bhi karo. E.g. Sachin batting karte hue bowlers ke dimaag ko padhta hai...

Financial attractiveness of Industry
ye dekho kaunsa business ki demand jyaada hai. 2006 se 2008 tak steel aur cement bahut upar tha par ab vo utna attractive nahin raha.
Industry ki attractiveness ka analysis - both short term and long - term karna.
Factors dat u will consider in analysis are- Growth potential of Industry, Competition, Effect of it on profit ,Effect of triggers or changes on industry's future & problems effecting industry as a whole like high excise duty.

Key Success Factors
It is the strongest drive ............. the factors in an organisation which can lead to great success .... it has the powerful impact on the business and on mental ability of employees, on market , on competitive capabilities of industry as a whole!
It focuses on competitive success or competitive failure!. a company shd realize its KSFs in order to achieve the height of success............... it is not only an important factor but most CRUCIAL factor which can make a BIG DIFFERENCE for a short term or for a long term..

SWOT ANALYSIS:
This is one of the most important requirements for formulating a meaningful strategy. The comparison of strengths , weaknesses , opportunities,and threats is normally referred to as a SWOT analysis.
STRENGTH: strength is an inherent capability of the org. which it can use to gain strategic advantage over its competitors .
WEAKNESS: a weakness is an inherent limitation or constraint of the org. which creates disadvantages to it, if not managed properly
OPPORTUNITY: an opportunity is a favourable condition in the organisation's environment which enables it to strengthen its position.
THREAT: a threat is an unfavourable condition in the organisation's environment which causes a risk for, or damage to , the organisation's position.

TOWS ANALYSIS
TOWS is the way in which a company can employ their internal and external analysis and match these up to one another. Without a specific implementation program, the analysis from SWOT analysis is generally regarded as pointless. TOWS can help create a plan of action.

PORTFOLIO ANALYSIS
Kisi bhi business mein 3 cheez manage karni hoti hai - Products, Business Units & Companies. Inhe collectively portfolio kehte hai. So business have a major task of managing this portfolio. They s'd analyze portfolio from time to time i.e. which products and business units s'd be continued and which s'd be divested.
Unhi products aur business units ko chalana hai jisse organaization strong bane aur shareholders ko faydaa pahuche.
3 concepts of Portfolio Analysis are:-
Strategic Business Unit
Company division, product line within a division, or single product or company brand that has an objective and mission different from other company business and that can be marketed independently from the rest of the company. The organizational structure of an SBU is typically less disciplined than the organizational structure of the parent company, allowing the SBU to respond more quickly to market changes and opportunities.

Experience curve
It is based on common observation that avg. cost per unit dec. as business accumulates experience in terms of cumulative volume of production.It is also known as learning curve. It is helpful in achieving competitive cost advantage over the competitors. Efficiency increased as workers do repetitive productive work. It means Big corporate house will have lower cost per unit in comparison to smaller industries.

Product Life cycle
It depicts product's sales volume over successive four stages of product life cycle.

BCG MATRIX
BCG matrix has 2 dimensions:
a.Market Share
b.Market Growth
The basic idea behind it is that the bigger the market share of the product and the faster the product's market grows the better it is for the company
See the 2*2 matrix and continue reading ahead simultaneously
Once the products are placed in the matrix it results into 4 categories
1.Stars
      They have a high market share as well as high market growth.They are best long run opportunities for the company's growth and profitability..They are the leaders in the field and so generate lot of cash.They require lots of investment to maintain the market share and expand further.They generally exceed the internal cash generation.They are the priority customers of corporate resources and have a low cost structure due to their higher market share compared to the rivals
2.Cash Cows
   They are low growth,high market market share products.Because of their high market share they have low costs and generate lots of cash.Since their growth is low,they do not require lots of investment.Therefore,they are able to provide funds for the firms operating,financing as well as investing activities.They form the foundation of the firm and stability is the ideal strategy for them
3.Dogs
      These are defined as those with low growth and low relative market share compared to the rivals.their low market share signifies their higher cost structure against their rivals.It tends to be a very difficult and extremely expensive task for them to gain considerable market share.Divestment or rapid harvesting is the recommendation for these weak businesses
4.Question Marks
They are growing rapidly and thus consume large amounts of cash, but because they have low market shares they do not generate much cash. The result is a large net cash consumption. A question mark has the potential to gain market share and become a star, and eventually a cash cow when the market growth slows. If the question mark does not succeed in becoming the market leader, then after perhaps years of cash consumption it will degenerate into a dog when the market growth declines. Question marks must be analyzed carefully in order to determine whether they are worth the investment required to grow market share.

Ansoff's product/market matrix

Ansoff's product market groth analysis me ek relationship establish ki gayi hai product and market me beech me....see the figure in the book...isme 2* 2 matrix banega...4 situations ho sakte hain...
1. market penetration- here the org remains with the existing product in the existing market and tries to improve its operations there only. kaise apne sales improve kar sakte hain.. improve kar sakte hain- better marketing policies, better production processes , lowering costs....matlab usi situation me khud ko improve karne ki koshish...ye risky nai hai...zyada investment bhi nai chahiye...
2. market growth-ek new attractive market khoja jata hai ... org same product ko new market me lekar jati hai.....isme org ko pata hai ki product ko kaise sell kar sakte hain ...price low karke buyers ko attract kar sakte hain...apne market ko expand karne ki koshish karte hain...eg Vodafone ne last year apne operations Bihar me start kiye...
3. product growth- org existing market me new product lati hai....present buyers ko wo janta hai ...unki mentality pata hai...isi experience ka use karke better innovative product lata hai...and existing buyers ko bechte hain...eg- HUL same market me lux bechte the ..fir pears lekar aaye...
4. diversification-org new market me new product lekar jati hai..it can be in related product or new product......its very risky as org cant take benefit of either its existing buyers or present market share....they have to start right from the scratch....eg-a cement manufacturer entering into electronics industry..

GE MODEL
GE model is basically an extension of BCG matrix...but yahan...maket share is replaced by business position which is the sum total of the organisation's control and strenght in the market depending upon its size,state of technology,market share,profitability,extent of competition strenght,its growth potential,customer base,innovation,cacability of human resources,marketing,cost cutting,calibre of mgt,...means organisation ki market me kitni achi position hai...
on the other hand we measure the market attractiveness....this constitutes of a number of factors like market growth,,its size,profit margins,no. of competitors,level of competition,availibiity of resources,state of economy,technology,price levels,govt. regulations,freedom of entry and exit...matlab market kitna attractive hai...
we construct a 3*3 matrix..isme sirf high and low nai..medium level ko bhi consider kiya gaya hai....har SBU ko isme place karte hain.....
UTILITY:now SBUs ko dekha jayega unki position ke according...us SBU ko growth chahhiye ya shut down karna chahiye..RESOURCE ALLOCATION,preferences and priorities can be fixed on the basis of this matrix.we can now decide what action is most profitable fr an org in the particular SBU..whether to invest in it or divest and shift the funds blocked else where in some other SBU...kaun se SBU me kitne resources ki zarurat hai ye pata chalega...jahan zarurat hogi wahan invest karenge..jahan faaltu ke funds block hai..wo funds kahin aur lagayenge ki zyada se zyada benefit mile..
The GE business screen has three main advantages over the BCG matrix.

The terminology is more acceptable, especially the portion covering the harvest and / or divest section of the matrix.
Multiple factors are taken into account in determining where a business fits on the two dimensions.
Further the 3 categories for industry attractiveness and business strength result in finer distinctions among businesses, especially those that are average. (9 option available)

ADL MATRIX

*

The ADL matrix from Arthur D. Little is a portfolio management method that is based on product life cycle thinking.

The ADL portfolio management approach uses the dimensions of environmental assessment and business strength assessment. The environmental measure is an identification of the industry's life cycle. The business strengths measure is a categorization of the corporation's SBU's into one of five (6) competitive positions: dominant, strong, favorable, tenable, weak (and non-viable). This yields a 5 (competitive positions) by 4 (life cycle stages) matrix. Positioning in the matrix identifies a general strategy.

In the ADL approach, the line of business or SBU is not especially defined by a product or organizational unit. The strategist must identify discrete businesses by finding commonalties among products and business lines using the following criteria as guidelines:

Common rivals
Prices
Customers
Quality/Style
Substitutability
Divestment or liquidation

This assessment of the industry life cycle stage of each business is made on the basis of:

Business market share,
Investment, and
Profitability and cash flow.

The competitive position of a firm is based on an assessment of the following criteria:

Dominant: Rare. Often results from a near monopoly or protected leadership.
Strong: A strong business can usually follow a strategy without too much consideration of moves from rivals.
Favorable: Industry is fragmented. No clear leader among stronger rivals.
Tenable: Business has a niche, either geographical or defined by the product.
Weak: Business is too small to be profitable or survive over the long term. Critical weaknesses.

Known limitations of the ADL matrix include:

There is no standard length of life cycles,
Determining the current industry life cycle phase is awkward,
Competitors may influence the length of the life cycle.

Index of Inputs
Bhavesh Sir
Sneha
Pulkit
Lovely
Neha
Dhaval

1 Like

Sunshine (Helping All) (10575 Points)
Replied 17 February 2011

Originally posted by : Dhaval K.Toprani
	Miss SM..aap hume sir kahe ye accha nahi lagta...

ab to aadat pad gayi hai DHAVAL SIR..!!!

Dhaval K.Toprani (CA-IPCC Student) (1150 Points)
Replied 17 February 2011

ye kaam toh dusron ka hai..maine toh bas compile kiya hai aur thoda bahut beech mein bola hai...

2 Like

Vikas Gupta (CHARTERED ACCOUNTANT) (16295 Points)
Replied 17 February 2011

GREST DEAR...GOOD WORK

1 Like

SONAM (CA-PCC ) (54 Points)
Replied 17 February 2011

Gr8 job ...yaar ... tumne tho meri problem hi solve kardii .... i would think k SM kaise hoga ...theory hai ...par after seeing this notes .....ab tho office me baithe baite padna b ho jaa e ga ......aise hi continue karo....

All the best

1 Like

Group Study Notes

54 Replies

Online classes for CA CS CMA. Professional courses for GST, Tally, Others & Books

GREAT WORK....GOOD GOING....

Sneha - SHINING STAR OF CCI / NT OF CCI
Pulkit- CCI WRITER / NT OF CCI
Lovely- NEW TALENDTED OF CCI
Dhaval- NEW TALENTED OF CCI

GREAT WORK....GOOD GOING....

Sneha - SHINING STAR OF CCI

What a concept ************** great !!!!!!!!!

Ansoff's product/market matrix

The ADL matrix from Arthur D. Little is a portfolio management method that is based on product life cycle thinking.

In the ADL approach, the line of business or SBU is not especially defined by a product or organizational unit. The strategist must identify discrete businesses by finding commonalties among products and business lines using the following criteria as guidelines:

This assessment of the industry life cycle stage of each business is made on the basis of:

The competitive position of a firm is based on an assessment of the following criteria:

Known limitations of the ADL matrix include:

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Group Study Notes

54 Replies

Online classes for CA CS CMA. Professional courses for GST, Tally, Others & Books

GREAT WORK....GOOD GOING....

Sneha - SHINING STAR OF CCI / NT OF CCI Pulkit- CCI WRITER / NT OF CCI Lovely- NEW TALENDTED OF CCI Dhaval- NEW TALENTED OF CCI

GREAT WORK....GOOD GOING....

Sneha - SHINING STAR OF CCI

What a concept ****************** great !!!!!!!!!

Ansoff's product/market matrix

The ADL matrix from Arthur D. Little is a portfolio management method that is based on product life cycle thinking.

In the ADL approach, the line of business or SBU is not especially defined by a product or organizational unit. The strategist must identify discrete businesses by finding commonalties among products and business lines using the following criteria as guidelines:

This assessment of the industry life cycle stage of each business is made on the basis of:

The competitive position of a firm is based on an assessment of the following criteria:

Known limitations of the ADL matrix include:

Leave a reply

Recent Topics

Related Threads

Popular Discussion

Trending Online Classes

Subscribe to the latest topics :

Search Forum:

Sneha - SHINING STAR OF CCI / NT OF CCI
Pulkit- CCI WRITER / NT OF CCI
Lovely- NEW TALENDTED OF CCI
Dhaval- NEW TALENTED OF CCI

What a concept ************** great !!!!!!!!!