Strategic Choice

This process involves understanding the nature of stakeholder expectations (the "ground rules"), identifying strategic options, and then evaluating and selecting strategic options

Strategic Analysis

This is all about the analysing the strength of businesses' position and understanding the important external factors that may influence that position. The process of Strategic Analysis can be assisted by a number of tools, including:

PEST Analysis - a technique for understanding the "environment" in which a business operates
Scenario Planning - a technique that builds various plausible views of possible futures for a business

Five Forces Analysis - a technique for identifying the forces which affect the level of competition in an industry

Market Segmentation - a technique which seeks to identify similarities and differences between groups of customers or users

Directional Policy Matrix - a technique which summarises the competitive strength of a businesses operations in specific markets

Competitor Analysis - a wide range of techniques and analysis that seeks to summarise a businesses' overall competitive position

Critical Success Factor Analysis - a technique to identify those areas in which a business must outperform the competition in order to succeed

SWOT Analysis - a useful summary technique for summarising the key issues arising from an assessment of a businesses "internal" position and "external" environmental influences.

Strategy at Different Levels of a Business

Strategies exist at several levels in any organisation - ranging from the overall business (or group of businesses) through to individuals working in it.

Corporate Strategy - is concerned with the overall purpose and scope of the business to meet stakeholder expectations. This is a crucial level since it is heavily influenced by investors in the business and acts to guide strategic decision-making throughout the business. Corporate strategy is often stated explicitly in a "mission statement".

Business Unit Strategy - is concerned more with how a business competes successfully in a particular market. It concerns strategic decisions about choice of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new opportunities etc.

Operational Strategy - is concerned with how each part of the business is organised to deliver the corporate and business-unit level strategic direction. Operational strategy therefore focuses on issues of resources, processes, people etc.

strategy - what is strategy?

Definition:
Johnson and Scholes define strategy as follows:
"Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations".

In other words, strategy is about:
* Where is the business trying to get to in the long-term (direction)
* Which markets should a business compete in and what kind of activities are involved in such markets? (markets; scope)
* How can the business perform better than the competition in those markets? (advantage)?
* What resources (skills, assets, finance, relationships, technical competence, facilities) are required in order to be able to compete? (resources)?
* What external, environmental factors affect the businesses' ability to compete? (environment)?
* What are the values and expectations of those who have power in and around the business? (stakeholders)

ansoff's product / market matrix

Introduction
The Ansoff Growth matrix is a tool that helps businesses decide their product and market growth strategy.

Ansoff’s product/market growth matrix suggests that a business’ attempts to grow depend on whether it markets new or existing products in new or existing markets.
The output from the Ansoff product/market matrix is a series of suggested growth strategies that set the direction for the business strategy. These are described below:

Market penetration
Market penetration is the name given to a growth strategy where the business focuses on selling existing products into existing markets.

Market penetration seeks to achieve four main objectives:
• Maintain or increase the market share of current products – this can be achieved by a combination of competitive pricing strategies, advertising, sales promotion and perhaps more resources dedicated to personal selling
• Secure dominance of growth markets
• Restructure a mature market by driving out competitors; this would require a much more aggressive promotional campaign, supported by a pricing strategy designed to make the market unattractive for competitors
• Increase usage by existing customers – for example by introducing loyalty schemesA market penetration marketing strategy is very much about “business as usual”. The business is focusing on markets and products it knows well. It is likely to have good information on competitors and on customer needs. It is unlikely, therefore, that this strategy will require much investment in new market research.

Market development
Market development is the name given to a growth strategy where the business seeks to sell its existing products into new markets.

There are many possible ways of approaching this strategy, including:
• New geographical markets; for example exporting the product to a new country
• New product dimensions or packaging: for example
• New distribution channels
• Different pricing policies to attract different customers or create new market segments

Product development
Product development is the name given to a growth strategy where a business aims to introduce new products into existing markets. This strategy may require the development of new competencies and requires the business to develop modified products which can appeal to existing markets.

Diversification
Diversification is the name given to the growth strategy where a business markets new products in new markets.
This is an inherently more risk strategy because the business is moving into markets in which it has little or no experience.
For a business to adopt a diversification strategy, therefore, it must have a clear idea about what it expects to gain from the strategy and an honest assessment of the risks.

Some latin terms

Abatement = Removal or stopping of a nuisance.
Ab initio = Latin phrase meaning ‘from the beginning’.
Abjure = To swear not to bear allegiance to another country.
Abscond = To go away without permission or not to return to the court after being
released on bail or to escape from prison.
Actus Reus= Latin phrase meaning ‘Guilty Act’, Act which is forbidden by the Criminal
Law, one of the two elements of a crime.
Ad Idem = Latin phrase meaning ‘in Agreement.’
Adjourn = To stop a meeting for a period, to put off a legal hearing to the later date.
Ad Litem = Latin phrase meaning ‘referring to the case at Law’
Guardian ad Letem = Person who acts on behalf of a minor who is a
defendant in a court case.
Ad valorem = Latin phrase meaning ‘according to value’.
Alieni Juris= Latin phrase meaning ‘of another’s right’. A person (such as minor) who
has a right under the authority of a guardian.
Amicus Curiae = Latin phrase meaning ‘friend of the court’: Lawyer who does not
represent a party in a case but who is called upon to address the court
to help clear up a difficult legal point or to explain something which is
in the public interest.
Ante = Latin adverb meaning ‘which has taken place earlier’ or ‘before’.
Status Quo Ante = the situation as it was before.
A posteriori = Latin phrase meaning ‘from what has been concluded afterwards’.
A posteriori argument = Argument based on observation.
Affidavit = written statement which is signed & sworn before a solicitor and which can
then be used as evidence in court hearings.
Animus = Intention.
Animus cancellandi = the intention to cancel.
Animus Furandi = Intention to steal.
Animus Manendi = Intention to stay (in a place)
Animus Revocandi = Intention to revoke (A will)
Annul = To cancel or to stop something having a legal effect.
Appeal = Asking a higher court to change a decision of a lower court.
Arson = Notifiable offence of setting fire to a building.
Audi Alteram Partem = Latin phrase meaning ‘Hear the other side’: A rule in natural
justice that everyone has the right to speak in his own defence
and to have the case against him explained to him.
Automatism = Defence to a criminal charge whereby the accused states he acted
involuntarily.
Autopsy = Examination of a dead person to see what was the cause of death.
Autrefois Acquit = French phrase meaning ‘previously acquitted’. Plea that an accused
person has already been acquitted of the crime with which he is
charged.
Autrefois Convict = French phrase meaning ‘previously convicted’. Plea that an accused
person has already been convicted of the crime with which he is now
charged .
Aver = To make a statement or an allegation in pleadings.
Attorn = To transfer.
Asylum = Hospital for people who are mentally ill.
Arm’s length = Not closely connected, to deal with someone at arm’s length = To deal
as if there were no connections between the parties.
Appurtenant = To or belonging to.
Antedate = To put an earlier date o a document.
Amnesty = Pardon, often for political crimes, given to several people at he same
time.
Alimony = Money which a court orders a husband to pay regularly to his separated or
divorced wife.
Adjoin = To touch another property.
Accretion = Enlargement of a piece of land by natural causes.
Accredited = (Agent) who is appointed by a company to act on its behalf.
Alienation = Transfer of property to someone else.
A fortiori = Latin phrase meaning ‘for a stronger reason
Affray = Public fight which frightens other people

Aggrieved = Who has been damaged/ harmed by a defendant’s actions
Autarchy = Situation where a state has total power over itself & rules itself without
outside interference
Autarky = Situation where a state is self-sufficient & can provide all its needs without
outside help.

Companies Act_Practical Problems_24

Bush and Tony Private Limited approached you seeking your opinion on the following appointments relating to Directors and their relatives.
(i) Appointment of Mr. Somen (relative of one of the Directors) as the Managing Director of the company on a monthly remuneration of Rs 35,000 and other perquisites as are currently being allowed to other executives of the company.

(ii) Appointment of Mr. Raman (relative of one of the Directors) as the General Manager-Sales of the company on a consolidated monthly remuneration of Rs. 30,000.

(iii) Appointment of Mr. Kabi (relative of one of the Directors) as an Accounts Manager of the company on a consolidated monthly remuneration of Rs 17,000.

Express your opinion explaining the relevant provisions of the Companies Act, 1956.

(i) Special resolution is required for the appointment of a relative of a director at an office or place of profit carrying a monthly remuneration of Rs. 10,000 or more.

However the office of a managing or whole time director has been held not to be an office or place of profit. A managing or whole time director draws remuneration to which he is entitled as a director. If he does not draw anything more than this, his holding office cannot be said to be an office or place of profit [Department Circular No. 4/76(8/12/314(1B)/75-CL-V), dated 11.2.1976]. Also, section 314(1) does not apply where the appointment is made at the office of a managing director.

Therefore, the appointment of Mr. Somen as managing director does not attract the provisions of section 314. However, his appointment as a managing director requires the approval of the Central Government or compliance with Schedule XIII (Section 269).

(ii) Special resolution is required for the appointment of a relative of a director at an office or place of profit carrying a monthly remuneration of Rs. 10,000 or more. Since the remuneration payable to Mr. Raman exceeds the monthly remuneration of Rs. 10,000, such appointment can be made only with the consent of shareholders by passing a special resolution. However, it shall be sufficient if the special resolution is passed at a general meeting of the company held for the first time after the holding of such office or place of profit.

(iii) Special resolution is required for the appointment of a relative of a director at an office or place of profit carrying a monthly remuneration of Rs. 10,000 or more. Since the remuneration payable to Mr. Kabi exceeds the monthly remuneration of Rs. 10,000, such appointment can be made only with the consent of shareholders by passing a special resolution. However, it shall be sufficient if the special resolution is passed at a general meeting of the company held for the first time after the holding of such office or place of profit.