An of learning and clarifying all doubts regarding different

An important part of learning in SHRM course is
writing down the findings, experiences, ideas, and other thoughts during the
course in a learning diary. There are many other positive things which happened
in SHRM course classes like Discussion on the various case studies. I
personally like this way of learning and clarifying all doubts regarding
different concepts.

 

Session 1-2 : What is
Strategy? Industry Analysis

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In the first lecture we
developed basic understanding about strategy and strategic management. In the
class slide strategy was defined as “strategy is the means by which individuals
or organizations achieve their objectives” but besides these points careful
planning and the implication of the actions which would be taken should also be
considered. It was also discussed upon that the strategic decisions may be
Complex, Have some Uncertainty, Rely on networks, etc. Hence I would like to
conclude that strategic choices and decisions are something which has to be
given a lot of thought to before being implemented in the organization as it
may affect the whole dynamics of the organization. In the class we also
discussed few of the examples which may be considered as Strategic. We also
learned about classifying strategy into various spheres as Corporate Strategy, Business
strategy and Functional Strategy. Corporate Strategy may be defined in
reference of industries and how they want to compete with a plan.

For being an effective
business partner, one needs to Know the firm’s overall business strategy – its
long term Corporate and short term business plans. This helps in creation of an
effective Human Resources plan. We started with an interesting case study of
Robin Hood. It taught me the approach one needs to have to understand the
problem right in the first place. One needs to do a complete threadbare
analysis of the identification of the problem in terms of understanding of the
context, change in context, resource availability or constraints, planning,
structure of the organization, etc. As you never know that which may seem as an
apparent problem may turn out to be very different eventually. And one can have
different possible alternatives to the same problem. 

For any firm to have a
strong business footing, it needs to have a clear business strategy. It should
now about ‘where’ to compete- which is about which industry to compete with,
for example, a camera manufacturer, like Nikon or Canon have to compete in
their industry as well as mobile handsets that are now coming up with inbuilt
cameras in the phones. The firms have to decide on ‘how’ to compete, that is,
what strategic positioning to have to be able to sustain in the business. A
micro level understanding of the internal and external environment of the firm,
including its suppliers, competitors and customers is of prime importance if
one has to think of sustainability. 

To be able to create a
variety, needs or access based positioning, one needs to clearly understand
what is the objective, scope and domain of the business. That would then lead
to coming up with the competitive advantage. It is very difficult for any one
of them to imitate the other. That’s how the competitive advantage should be –
difficult to imitate. 

Another example that
was discussed in the class was the Airlines Industry. While the slides had the
example of South West Airlines whose flawless processes were discussed, the
Indigo Airlines example was taken up in the Indian Context. The success of
Indigo is because of the efficiency levels of the processes and systems
deployed at each stage for a generic efficient experience for any traveler.
Since these airlines have clearly worked out their strategy of where to
differentiate and then structured their system, it has given Indigo a
competitive advantage despite being a late entrant but a profitable player even
in a tough economic scenario.

What was also amazing
was that a lot of top management executives are unable to come up with their
Company’s strategy despite being in senior positions. Unless each professional
is unaware of that, execution at ground level cannot be synchronized
accordingly. Company vision, mission and brand value should be cascade across
the organization upto the last level. every employee made sure that they always
lived upto the brand values of the organization at all times. 

The next session on Industry analysis involved at doing a
valid PESTLE analysis for getting a
heads up on the elements that affect any organization. The SCP paradigm was an interesting insight.

Hence during the first
lectured I learned about What is strategy and what makes few decisions
strategic, what consideration and aspects should be studied before taking any strategic
decision, etc.

We covered the Porter’s
The Five competitive Force frameworks tool for to the industry analysis and
business strategy development. It is consisted of five key factors; entry
barriers, buyer power, supplier power, substitute competitions and industry
competitor. The SWOT is useful when we are analyzing the internal environment of
any Organisation. It is a strategic planning method used to evaluate the
Strengths, Weaknesses, Opportunities, and Threats. (Strengths: characteristics
of the business or team that give it an advantage over others in the industry.
Weaknesses: are characteristics that place the firm at a disadvantage relative
to others. Opportunities: external chances to make greater sales or profits in
the environment. Threats: external elements in the environment that could cause
trouble for the business) . Professor gave us the assignment to do before the
next class on Samsung Electronics.

Session 3-4: Creating
and Sustaining Competitive Advantage

The session started
with the discussion on the case study analysis of the Porter’s Five forces
Model. This was quite good as the reviews discussed helped us to understand the
principle of strategy a bit more clearly. With this case study I understood
about the dynamics of an environment of an organization i.e. How Managers can
make sense of an uncertain world around their organization-the business
environment.

The 5- Forces analysis
is a very helpful tool to analyse the Macro-environment and analyses the
Supplies, Buyers, Substitutes and Potential Competitors it can help us to
analyse the current position of an industry in the market, what threats it is
facing and how can it reduce its productions/marketing costs to make it price
competitive. Also emphasises the industry to keep making advancements in its
product line or technology to give it a competitive edge.

In Samsung Electronics company
Faced threat of Chinese entry into the memory chip industry.

Threat of Substitutes –

·        
No substitute for DRAM up til now

·        
Threat from substitutes created due to
technological advancement

Bargaining power of
suppliers –

·        
Powerful suppliers due to smaller
numbers

·        
Only 2-3 main players dominated key
segment

Bargaining power of
buyers –

·        
Price sensitivity of customers

·        
Decreasing product life cycle due to
changing customer preferences

Threat of new entrants

·        
Large scale potential entry by Chinese
Firms

·        
Barrier of entry through economies of
scale- huge capital outlay required

·        
Steep learning curve  as evident in Exhibit  7 ( R & D 
Costs)

Rivalry with existing
competitors –

·        
Competitive advantage due to cost
leadership and strong R & D

·        
Competition from existing players high

So, In the short run,
there is no immediate need for Samsung to collaborate and no need to engage in
price wars or predatory pricing. They can Engage into strategic alliances with
Infineon and Elpida to restrict their partnership with Chinese firms. Enter
into high value niche markets in the short run and exploit the competitive
advantage in R & D.

In Long run, looking at
the present financials, it might seem less than probable for the Chinese
offerings to be sustainable in the long run. However, considering the boost
that the Chinese firms are receiving from their government, they would soon
venture into the memory chip market. I recommend horizontally integrating with
Chinese firms only in the areas where we cannot attain a significant cost
leadership or are not on a level playing field. So Focus should be on
preserving expertise in production and research.

The session on industry
analysis was interesting especially because of the discussion on Nokia as an
example. We went through the entire business strategy to pick threads on what
went wrong for it when at one particular time, it was a clear ‘leader’ in the
market. The ‘ecosystem’ went wrong for it. It did not notice the changes ahead
of time. That’s the reason Samsung which understood the upcoming changes in
consumer trends overtook Nokia. Every firm needs to do a deep dive on what
industry is it actually vying for. Apple was discussed as an example – it had
started out as a Computer manufacturer. It has sustained all the while because
it understood the changing eco system well ahead of its competitors. How
successful organizations reach ‘burning platforms’ sent shivers down the spine.
The possibility of a sixth force was also considered in the Porter’s model of
competitive advantage. The types of competitive advantage that were brought up
were an average competitor, differentiated competitor, low cost differentiator
and finally what came across clearly was dual advantage in terms of willingness
to pay as well as supplier opportunity cost. At the end Professor gave us the
assignment to do Industry Analysis before the next class on Stone Finch, Inc.

Session 5-6 Resource
based Strategy

This Session focused on
How to maintain sustainable competitive advantage. The Value Chain Analysis was
the key which helped to Disaggregate the firm into separate activities and Set
your priority as an organisation and Compare costs by activity, also Identify
various cost drivers and Identify the various linkages and Identify
opportunities for reducing costs

We also studied the
various drivers for the Cost Advantages – Economies of scale and learning,
Production techniques, Product design, Input Costs, Capacity Utilisation. Also
as per Porter providing something unique that is valuable to the buyer beyond
simply offering a low price, Create value for your customers. Differentiation
and Segmentation are the two ways to get the competitive advantage.

When the external
environment is subject to rapid change internal resources and capabilities
offer a more secure basis for strategy than market focus. So resources and
capabilities are the primary sources of profitability for any Organisation. And
a firm’s resources at a given time could be defined as tangible (1. Financial
Resources, Organizational Resources, Physical Resources, Technological
Resources) and intangible (Innovation Resources, Reputational Resources, Human
Resources). Organizational culture is a very important resource it is a complex
set of values, beliefs, assumptions, and symbols that define the way in which a
firm conducts its business. Organisational culture is rare and valuable for an organization
and is difficult to imitate. I learn about the strategy has different levels;
two basic levels are corporate level and business level. This session give us a
brief insight on how we can have a competitive advantage in a market over our
competitors by using various approaches.

Session 7-8 Strategy
for Global Market

Subsidairy’s are recent
modification to divisional Structure, being composed of independent product market
segments that are given primary market responsibility. The slide on
Globalisation was a nice depiction of the concept. While we actually consider
globalization to have become very rampant, the ground reality is quite
different. Mostly strategies are formulated at the Corporate HQ level , the
overall strategic direction and structure of the multinational firm such as
extent of the firm’s involvement across different operations and countries
remains different. Implementation of these strategies is
typically done at the subsidiary-level. These subsidiaries have strategic Role
in terms of determining environmental Uncertainty, Complexity of technology and
the need to adapt to local conditions. Transnational Organisations are one with
high Interdependence, Differentiated contributions by subsidiaries to integrate
worldwide operations, developed jointly and shared worldwide
and there is extensive flow of knowledge and people in multiple directions.
Excess
devotion to any one structure became problematic. So, organizations must be
capable of both global integration & local adaptation. Companies should
promote two-way flows between HQ/subsidiaries and subsidiaries/subsidiaries. Thus
one should have the efforts to develop a hybrid MNE configuration. In such a volatile
world of transnational corporations, concept of universal global manager might
not work as it requires Specialists.

Overall, After studying
this strategic management course which is emphasise majorly on understanding
the strategic position of organizations, Creating and Sustaining Competitive
Advantage and then made the strategic choices for the future ( Resource based
or Global market based) and turning these strategies into action. The group
work case study on Samsung electronics and Stone Finch Inc was also very good. A
clear understanding of the linking the Organisational overall strategy with the
HR policies and how critical it is to have the alignment among these. From an
HR Professional angle, I learnt that one needs to have a Strategic outlook as
well before implementing any HR policies and practices using approach Porter’s
approach. 

My Take away is to take
right actions in the future by practicing these learned knowledge of strategic
management.