Stake holder’s Objective:
Organization deals with many stakeholders. They have their own needs & objectives.
Organization deals with many stakeholders. They have their own needs & objectives.
- Stakeholders can be – employees, suppliers, customers, shareholders, society, government etc.
- It is difficult to cater all stakeholders & make them all happy because their objectives are not aligned with org objectives & strategies.
Current Competencies:
Every org. maintains its distinctiveness quality mainly based on their current competencies.
Every org. maintains its distinctiveness quality mainly based on their current competencies.
- They make an org. “the”
- They are the collective learning in the org. skills especially how to coordinate diverse production & integrate multiple streams of technologies.
Competencies give competitive advantage because they are done by an org. better than other competitors
Diversification Strategies
- Diversification is the crucial for all organizations.
- It is used to aquire resources, new market and adopts new environment and technologies.
- Managers are also in dilemma to diversify or not to diversify.
Some questions might help managers to go for diversifications.
1. What can our company do better than any of its competitors in its current market?
2. what strategic assets do we need in order to succeed in new market?
3. Can we catch up to or leap frog competitors at their own game?
4. Will diversification break-up strategic assets that need to be get together?
5. Will we be simply player in the new market or will we emerge a winner?
6. What can our company learn by diversifying and our we sufficiently organized to learn it?
Some questions need to be answered?
- Which are our key stake-holders?
- How we can make every stake holders happy?
- List out the priority stake holders?
- How stakeholders affect our strategic decisions?
- Whether we are going for related diversification or unrelated diversification?
- If we are going for related diversification, which are the current competencies we can leverage in this diversification?
- If require how we can achieve some competencies for this diversification?
- Which are the stake holders need to be taken care of, what will be their reaction?
- What will be their expectation from this diversification?
- If we are going for unrelated diversification, whether our current competencies help us to move forward?
- Which are the new competencies should be brought & cultivate & how they could be source of competitive advantage?
- To cultivate these competencies which are the stake holder’ s needs we are going to ignore?
- How the key stake holders react & which are their expectations from this unrelated diversification?
- How these diversifications help us to grow & learn?
- Whether they align with org. ultimate goal & vision?
Illustrations
GCMMF-Gujarat Corporative Milk Marketing Federation
Gujarat Corporative Milk Marketing Federation was started with the philosophy of:
1) To serve the interest of milk producers.
2) To provide quality product that offer the best value to customers for money spend.
3) Its primary objective was not maximizing profit so, its primary stake holders where milk producers and milk consumers. It was started for the benefit of society.
4) Its competencies lie in;
a. Management of supply chain at low cost of operations
b. Managing efficient cold chain and distribution route for perishable items
c. Brand image of trust and quality among customers as well as farmers.
d. Innovative market strategy
- It always been in business of milk & milk related products but new emerging market of food processing it decided to go into field of fruit & vegetable based products.
- In this diversification whether it can leverage its old competencies or it requires to develop new competencies.
- It needs also to ask that how this diversification affects its market position in food processing industry & whether it also achieve success that it had achieved in milk business.
- The stakeholders were major govt. bodies.
- The main objective of the org. is to be the telecom backbone provider to China
- The current competencies lie in providing backbone infrastructure & financing & managing large scale technology Projects at low costs.
- The current technology that china Netcom has allowed it to provide cheaper as well as better quality transmission of VOIP as compared to its competitors.
- The diversification strategy could include moving into:
1. End to end bandwidth solutions.
2. VOIP & VPN connectivity.
3. Data centers for storage.
4. Connectivity & solutions to SMEs.
- None of these are in line with the firm’s mission, stake holder’s objectives nor are they in any way arising out of similar competencies as what the firm already has. The chances of the firm emerging as a leader in any of these other businesses also cannot be easily justified.
Intel
- Intel’s strategy has been centered on technological innovation & leadership.
- Intel was in memory business earlier then it moved to Microprocessor Company at the center of the PC revolution that eventually came to drive the PC industry.
- Its main stakeholders were shareholders & technology partners with whom it needs to maintain long term profitable relationship.
- Its core competencies lie in product differentiation in memory & processor business.
- Big brand reputation & relationship with Dell, Sony, Compaq & other technology partners.
- Intel is deciding to enter into an internet building block company.
- Here Intel comes into information technology business which requires different capabilities & whether this diversification will help intel to maintain its current growth & profit.
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