Perspective Category

4.3.1 - Strategy

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What is Strategy?
 Strategy is the planned route or framework and action steps through which an organization
reaches its end-goal and achieves mission objective(s).

 The Strategy competence describes how strategies are understood, change steps are planned &
implemented and business processes get transformed- using projects as vehicles.

 Performance against targeted goal is measured using key performance indicators ( KPIs)

Three levels at which Strategy is formulated and implemented

Corporate Level – Leadership level
Business Level – SBU level
Functional Level- Ex: Marketing, Operations, Finance, IT dept. level

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Organizations – Twin Strategy
Organizations adopt a combination of two strategies

• GROW THE BUSINESS ( GTB Strategy)

Increase Market Share, New products, new markets, Globalization
• RUN THE BUSINESS ( RTB Strategy)
Compliance, Regulatory, Sustenance, Cost effectiveness, Productivity

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 Business & Organizations

• A business is an industrial, commercial or professional operation involved in

the provision of goods or services. The main aim of the business is to fulfill
the demands of customers and sustain competitive advantage and
performance excellence- CAGR measure

• This competence element covers the impact of business issues on managing

projects, programmes and portfolios and vice-versa

• Projects are undertaken to fulfill business needs and achieve targeted

business performance / GTB or RTB objectives

• Projects must fit into the organization’s environment and be aligned to

mission goals and its vision

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Strategy Formulation steps
• Step 1 – Scanning the business environment
• External environment – for business opportunities and threats
• Internal environment - for business strengths, core competencies, weaknesses
• Step 2 - Inputs from different stakeholders
• Key customers
• Suppliers and sub-contractors
• Government policies with respect to Industry sector, we are in
• Technology changes and modernization needs
• Step 3 - Redefine the mission, goals and strategic objectives.
• Step 4 - Establish the framework for implementation strategy at Corporate level, Business unit level and
functional levels
• Step 5 - The implementation strategy – gets executed in the form of projects and aligned to achieve mission
objectives and reach end goal.

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 Market/ Economy
(threats/opportunities)

Environmental Analysis

Customer both Internal & external Stakeholders (other)

Firm
Mission, Goal, Strategy

Projects

System Environment &

Scope Culture
Work Breakdown Organization
Networks Leadership
Resources VMV Teams
Cost Partners
Project
Implementation 6
Porter’s 5 factor framework- scanning environment

Definition: The five forces model of analysis was developed by Michael Porter to analyse the
competitive environment in which a product or company works.

Forces that act on any product/ brand/ company:

1. The threat of entry: competitors can enter from any industry, channel, function, form or
marketing activity. How best can the company take care of the threat of new entrants?

2. Supplier power: what is the power of suppliers in this industry? How will their actions affect costs,
supplies and developments? If there are a few suppliers, power is in their favour and cost of
switching may be prohibitive; vice versa for a situation with lots of suppliers. There may be too
many buyers from too few suppliers.

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Porter’s 5 factor framework – scanning environment

3. Buyer power: there may be few buyers for the product, which could mean that they would drive
down prices and dictate business terms. What is their effect on the business? If there are many
buyers, sellers could decide not to supply to a few, because other buyers will step in.

4. Threat of substitutes: can another substitute the product? Tea for coffee; email for fax? What is
the likely possibility of this and what is its impact?

5. Competitive rivalry: all the four forces may come together to produce this force. All the resources
at a company's disposal may be put in to maintain market shares and sales. How intense is
competitive action, can it be countered?

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Michael Porter’s 5 factor framework -
Analysis

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10
 Levels of Business

 Strategic level – to create an environment for programs and projects to be effective.

 Organizational structure that suits programs and projects
 Cost and revenue accounting, auditing
 Communication system for reporting and instructions
 Resource allocation
 Tactical level – through the business case – cost, schedule, risks, resources, needs from
various departments, benefit to various departments
 Operational level – provide business requirements of the deliverables

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Key Performance Indicators

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KPIs- Infrastructure sector

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KPI Dashboards

Using KPI dashboards,

Management exercises control
What is Benchmarking
Benchmarking is the practice of comparing business processes and performance metrics (quality,
time and cost) to industry best performers and best practices from other companies.
• Benchmarks are reference points that you use to compare your performance against the
performance of others. These benchmarks can be comparing processes, products or operations,
and the comparisons can be against other parts of the business, external companies (such as
competitors) or industry best practises. Benchmarking is commonly used to compare customer
satisfaction, costs and quality.
• KPIs, on the other hand, are decision-making and monitoring tools, used to track performance in
relation to strategic goals. In other words, KPIs chart whether an individual, project, team,
business unit or entire company is on track to achieve its objectives. KPIs are a bit like an early
warning system, flagging up where things might be heading off-course and where action might be
needed.
So, when you use KPIs, you’re comparing progress in relation to a specific goal. And when you use
benchmarks, you’re comparing against others. You can use benchmarking to put your own KPIs into
context and to set targets for your KPIs.

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 BCG Matrix
The Boston Consulting group’s product portfolio matrix (BCG matrix) is designed to help with long-
term strategic planning, to help a business consider growth opportunities by reviewing its portfolio
of products to decide where to invest, which products to discontinue or which products need new
developmental efforts to increase value proposition. It's also known as the Growth/Share Matrix.
The basis for review is potential growth in market for a product vs current market share of the
organization vis-à-vis competitors having similar products in market.
The products are then grouped under 4 quadrants:
1. STARS quadrant – High growth potential, high-market share
2. CASH COW quadrant- High market share , but growth potential is ‘low’
3. UNDERDOG – Products which have low growth potential and low market share
4. ?? – Products with uncertainties (risk is more- high growth potential but low market
penetration)

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 BCG Matrix- Existing product portfolio Review
Star Question Mark

?
Strategy

High
Projects

Cow Dog
Market
Growth
Cash Cow Under Dog

Low

High Market Share Low 19

 How to use BCG Matrix

BCG Matrix shows a portfolio of products or services, so it tends to be more relevant to larger businesses
with multiple services and markets. However, marketers in smaller businesses can use similar portfolio
thinking to their products or services to boost leads and sales.
Recommendations:
•Dog products: Aim to remove any dogs from your product portfolio as they are a drain on resources.
However, this can be an over-simplification since it's possible to generate ongoing revenue with little cost.
For example, in the automotive sector, when a car line ends, there is still a need for spare parts. As SAAB
ceased trading and producing new cars, a whole business emerged providing SAAB parts.
•Question mark products: As the name suggests, it’s not known if they will become a star or drop into the
dog quadrant. These products often require significant investment to push them into the star quadrant. For
example, Rovio, creators of the very successful Angry Birds game has developed many other games you may
not have heard of. It’s not always easy to spot the future star and this can result in potentially wasted funds.
•Star products: Can be the market leader though require ongoing investment to sustain. They generate
more ROI than other product categories.
•Cash cow products: ‘Milk these products as much as possible without killing the cow!’ Often mature, well-
established products.
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