MB0038 semister-1 2014 solved
Q1. Define the terms ‘strategy’. Explain the following:
a) Corporate strategy
b) Business strategy
c) Functional strategy
Ans: - Definition of Strategy: Strategy means the grand plan and the term is borrowed from the military which distinguished between the grand plan and actual action by calling the former strategy and the latter tactics
a) Corporate strategy
If you are a company like TATA or BIRLA, you will have several businesses under you and a corporate headquarters which controls these. Each of these businesses may be run by an independent company much like Tata Motors runs the vehicle business and Tata Consultancy Service runs the IT business (they both are different companies). The corporate headquarters will have grand plans on how each business should operate. For example, it might say that that Tata Motors should design, develop, and manufacture an indigenous small car Nano or that TCS should expand business to China.
This grand plan created by the corporate headquarters is called ‘Corporate Strategy’. It lays down the grand plan to be followed by each business under a corporate headquarters. If you are small like Raju, you will not have a corporate strategy; however, will still have a strategy for your business.
b) Business strategy
Every business, small or big, will have a business strategy. This is the grand plan for doing business. For example, Raju can make a grand plan of expanding his business to another district or having branches. He can take a decision to be the provider of low cost furniture or highly differentiated furniture, household furniture only, modular furniture only, a supplier of all furniture needs, etc. This is what business strategy is. If you were a TATA company, each business of TATA (say Tata Motors, Tata Iron and Steel Company, Tata Hotels, etc) would have their own business strategy in consonance with the corporate strategy.
c) Functional strategy
Once you have a business strategy, each independent department will
a) Corporate strategy
b) Business strategy
c) Functional strategy
Ans: - Definition of Strategy: Strategy means the grand plan and the term is borrowed from the military which distinguished between the grand plan and actual action by calling the former strategy and the latter tactics
a) Corporate strategy
If you are a company like TATA or BIRLA, you will have several businesses under you and a corporate headquarters which controls these. Each of these businesses may be run by an independent company much like Tata Motors runs the vehicle business and Tata Consultancy Service runs the IT business (they both are different companies). The corporate headquarters will have grand plans on how each business should operate. For example, it might say that that Tata Motors should design, develop, and manufacture an indigenous small car Nano or that TCS should expand business to China.
This grand plan created by the corporate headquarters is called ‘Corporate Strategy’. It lays down the grand plan to be followed by each business under a corporate headquarters. If you are small like Raju, you will not have a corporate strategy; however, will still have a strategy for your business.
b) Business strategy
Every business, small or big, will have a business strategy. This is the grand plan for doing business. For example, Raju can make a grand plan of expanding his business to another district or having branches. He can take a decision to be the provider of low cost furniture or highly differentiated furniture, household furniture only, modular furniture only, a supplier of all furniture needs, etc. This is what business strategy is. If you were a TATA company, each business of TATA (say Tata Motors, Tata Iron and Steel Company, Tata Hotels, etc) would have their own business strategy in consonance with the corporate strategy.
c) Functional strategy
Once you have a business strategy, each independent department will