An important part of learning in SHRM course iswriting down the findings, experiences, ideas, and other thoughts during thecourse in a learning diary.
There are many other positive things which happenedin SHRM course classes like Discussion on the various case studies. Ipersonally like this way of learning and clarifying doubts regarding differentconcepts. Session 1-2 : What isStrategy? Industry AnalysisIn the first lecture wedeveloped basic understanding about strategy and strategic management. In theclass slide strategy was defined as “strategy is the means by which individualsor organizations achieve their objectives” but besides these points carefulplanning and the implication of the actions which would be taken should also beconsidered. It was also discussed upon that the strategic decisions may beComplex, Have some Uncertainty, Rely on networks, etc. Hence I would like toconclude that strategic choices and decisions are something which has to begiven a lot of thought to before being implemented in the organization as itmay affect the whole dynamics of the organization. In the class we alsodiscussed few of the examples which may be considered as Strategic. We alsolearned about classifying strategy into various spheres as Corporate Strategy, Businessstrategy and Functional Strategy.
Corporate Strategy may be defined inreference of industries and how they want to compete with a plan. For being an effectivebusiness partner, one needs to Know the firm’s overall business strategy – itslong term Corporate and short term business plans. This helps in creation of aneffective Human Resources plan. We started with an interesting case study ofRobin Hood. It taught me the approach one needs to have to understand theproblem right in the first place.
One needs to do a complete threadbareanalysis of the identification of the problem in terms of understanding of thecontext, change in context, resource availability or constraints, planning,structure of the organization, etc. As you never know that which may seem as anapparent problem may turn out to be very different eventually. And one can havedifferent possible alternatives to the same problem. For any firm to have astrong business footing, it needs to have a clear business strategy. It shouldnow about ‘where’ to compete- which is about which industry to compete with,for example, a camera manufacturer, like Nikon or Canon have to compete intheir industry as well as mobile handsets that are now coming up with inbuiltcameras 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. Amicro level understanding of the internal and external environment of the firm,including its suppliers, competitors and customers is of prime importance ifone has to think of sustainability.
To be able to create avariety, needs or access based positioning, one needs to clearly understandwhat is the objective, scope and domain of the business. That would then leadto coming up with the competitive advantage. It is very difficult for any oneof them to imitate the other. That’s how the competitive advantage should be –difficult to imitate. Another example thatwas discussed in the class was the Airlines Industry.
While the slides had theexample of South West Airlines whose flawless processes were discussed, theIndigo Airlines example was taken up in the Indian Context. The success ofIndigo is because of the efficiency levels of the processes and systemsdeployed at each stage for a generic efficient experience for any traveler.Since these airlines have clearly worked out their strategy of where todifferentiate and then structured their system, it has given Indigo acompetitive advantage despite being a late entrant but a profitable player evenin a tough economic scenario. What was also amazingwas that a lot of top management executives are unable to come up with theirCompany’s strategy despite being in senior positions. Unless each professionalis unaware of that, execution at ground level cannot be synchronizedaccordingly. Company vision, mission and brand value should be cascade acrossthe organization upto the last level. every employee made sure that they alwayslived upto the brand values of the organization at all times.
The next session on Industry analysis involved at doing avalid PESTLE analysis for getting aheads up on the elements that affect any organization. The SCP paradigm was an interesting insight.Hence during the firstlectured I learned about What is strategy and what makes few decisionsstrategic, what consideration and aspects should be studied before taking any strategicdecision, etc.We covered the Porter’sThe Five competitive Force frameworks tool for to the industry analysis and businessstrategy development. Professor gave us the assignment to do before the nextclass on Samsung Electronics.Session 3-4: Creatingand Sustaining Competitive AdvantageThe session startedwith the discussion on the case study analysis of the Porter’s Five forcesModel.
This was quite good as the reviews discussed helped us to understand theprinciple of strategy a bit more clearly. With this case study I understoodabout the dynamics of an environment of an organization i.e. How Managers canmake sense of an uncertain world around their organization-the businessenvironment.The 5- Forces analysisis a very helpful tool to analyse the Macro-environment and analyses theSupplies, Buyers, Substitutes and Potential Competitors it can help us toanalyse the current position of an industry in the market, what threats it isfacing and how can it reduce its productions/marketing costs to make it pricecompetitive. Also emphasises the industry to keep making advancements in itsproduct line or technology to give it a competitive edge.In Samsung Electronics companyFaced threat of Chinese entry into the memory chip industry.
Threat of Substitutes –· No substitute for DRAM up til now · Threat from substitutes created due totechnological advancementBargaining power ofsuppliers –· Powerful suppliers due to smallernumbers · Only 2-3 main players dominated keysegmentBargaining power ofbuyers –· Price sensitivity of customers · Decreasing product life cycle due tochanging customer preferences Threat of new entrants–· Large scale potential entry by ChineseFirms · Barrier of entry through economies ofscale require huge capital Rivalry with existingcompetitors –· Competitive advantage due to costleadership 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 inprice wars. Samsung can engage into strategic alliances with Infineon andElpida to restrict their partnership with Chinese firms. It can also enter thehigh value niche markets in the short run and exploit the competitive advantageof strong R & D. In Long run, looking atthe present financials, it might seem less than probable for the Chineseofferings to be sustainable in the long run. However, the Chinese firms arereceiving support from their government, which will result of them venture intothe memory chip market.So Focus should be on preserving expertise in productionand research.The session on industryanalysis was interesting especially because of the discussion on Nokia as anexample.
We went through the entire business strategy to pick threads on whatwent wrong for it when at one particular time, it was a clear ‘leader’ in themarket. The ‘ecosystem’ went wrong for it. It did not notice the changes aheadof time. That’s the reason Samsung which understood the upcoming changes inconsumer trends overtook Nokia. Every firm needs to do a deep dive on whatindustry is it actually vying for.
Apple was discussed as an example – it hadstarted out as a Computer manufacturer. It has sustained all the while becauseit understood the changing eco system well ahead of its competitors. Howsuccessful organizations reach ‘burning platforms’ sent shivers down the spine.The possibility of a sixth force was also considered in the Porter’s model ofcompetitive advantage. The types of competitive advantage that were brought upwere an average competitor, differentiated competitor, low cost differentiatorand finally what came across clearly was dual advantage in terms of willingnessto pay as well as supplier opportunity cost. At the end Professor gave us theassignment to do Industry Analysis before the next class on Stone Finch, Inc.
Session 5-6 Resourcebased StrategyThis Session focused onHow to maintain sustainable competitive advantage. The Value Chain Analysis wasthe key which helped to Disaggregate the firm into separate activities and Setyour priority as an organisation and Compare costs by activity, also Identifyvarious cost drivers and Identify the various linkages and Identifyopportunities for reducing costsWe also studied thevarious drivers for the Cost Advantages – Economies of scale and learning,Production techniques, Product design, Input Costs, Capacity Utilisation. Alsoas per Porter providing something unique that is valuable to the buyer beyondsimply offering a low price, Create value for your customers. Differentiationand Segmentation are the two ways to get the competitive advantage.
When the externalenvironment is very dynamic then internal resources and capabilities offer amore secure basis for strategy making than market focus. So resources andcapabilities are the primary sources of profitability for any Organisation. Anda firm’s resources at a given time could be defined as tangible (1. FinancialResources, Organizational Resources, Physical Resources, TechnologicalResources) and intangible (Innovation Resources, Reputational Resources, HumanResources).
Organizational culture is a very important resource it is a complexset of values, beliefs, assumptions, and symbols that define the way in which afirm conducts its business. Organisational culture is rare and valuable for an organizationand 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 abrief insight on how we can have a competitive advantage in a market over ourcompetitors by using various approaches. Session 7-8 Strategyfor Global MarketSubsidairy’s are recentmodification to divisional Structure, being composed of independent product marketsegments that are given primary market responsibility.
The slide onGlobalisation was a nice depiction of the concept. While we actually considerglobalization to have become very rampant, the ground reality is quitedifferent. Mostly strategies are formulated at the Corporate HQ level , theoverall strategic direction and structure of the multinational firm such asextent of the firm’s involvement across different operations and countriesremains different. Implementation of these strategies istypically done at the subsidiary-level.
These subsidiaries have strategic Rolein terms of determining environmental Uncertainty, Complexity of technology andthe need to adapt to local conditions. Transnational Organisations are one withhigh Interdependence, Differentiated contributions by subsidiaries to integrateworldwide operations, developed jointly and shared worldwideand there is extensive flow of knowledge and people in multiple directions.Excessdevotion to any one structure became problematic.
So, organizations must becapable of both global integration & local adaptation. Companies shouldpromote two-way flows between HQ/subsidiaries and subsidiaries/subsidiaries. Thusone should have the efforts to develop a hybrid MNE configuration.
In such a volatileworld of transnational corporations, concept of universal global manager mightnot work as it requires Specialists.Overall, After studyingthis strategic management course which is emphasise majorly on understandingthe strategic position of organizations, Creating and Sustaining CompetitiveAdvantage and then made the strategic choices for the future ( Resource basedor Global market based) and turning these strategies into action. The groupwork case study on Samsung electronics and Stone Finch Inc was also very good. Aclear understanding of the linking the Organisational overall strategy with theHR policies and how critical it is to have the alignment among these.
From anHR Professional angle, I learnt that one needs to have a Strategic outlook aswell before implementing any HR policies and practices using approach Porter’sapproach. My Take away is to takeright actions in the future by practicing these learned knowledge of strategicmanagement.