Bacchalog, let’s see third type, which is retrenchment strategy, now this question is comes for correct four marks, let’s see, now the firm is not doing well right when the pressure from stakeholders come to improve the performance all those stake holder they put pressure on CEO or the management when better opportunity available elsewhere then why wasting your resources correct at that time we can retrench pull back when firm has strength to utilize the opportunities right so taking opportunities or grabbing opportunities redefine the scope of business possible here when you retrench and save your resources divest a product, abandoned a market, reduce your product line all this is possible if you not getting good returns right you can simply switch over to some other better opportunities reduce pace of activity you can slow down sometimes at the need according to the requirement, according to the situation, either you reduce the pace of activity or you reduce the cost or reduce the advertisement expenses or you may reduce employees by giving voluntary retirement scheme to them right less frequently used generic strategy is retrenchment all these are possibility in retrenchment strategy so you can write all these and get four marks, now let’s see how to do retrenchment strategies, divest a product what Larsen and Tubro did right one of their section cement was been sold, abandoned market either you come out of rural section or rural area or urban areas, lay off right give them retirement to workers or reduce power consumption or take care of raw material shortage, reduce research and development if it is ineffective don’t waste your resources on such things, increase collection of receivables whatever amount is left from whenever, wherever right, settle quickly, all these are how to do right retrenchment, now variance of retrenchment strategy or how to do retrenchment, let’s see

Hi kids to better understand this chapter let’s take up few generic strategy or master strategy now these are the strategies given by the Glueck and jauch right they are stability strategy, Expansion strategy, Retrenchment strategy, and lastly combination strategy in which there may be a combo of any of the given now let’s take up one by one the very first is stability strategy which is do not think right as you are whatever you are doing continue the doing the same so remain in the same business same product. Objectives and scope remain same correct. Don’t do anything naya. Improve functional performance see how can you work better and better. Suitable when environment is certain and predictable. Usually followed by small and medium sized company because they cannot afford right to spend more to maintain market profits right kids remember that so these all are strategies which are followed by small and medium to maintain market profit now reasons for stability strategy

1. It is less risky, frequently employed strategy. “Kyun nuksan nahi hota isiliye”

2. It involves very few changes, no fresh investment.

3. The environment is stable.

4. Expansion may prove to be threatening.

So one goes for stability or don’t do anything new strategy i.e stability strategy. Now let’s take up the second Expansion strategy

1. Broaden the scope or new scope

2. Improve overall performance do some thing new

3. Introduce new products

Hi Kids let’s see now corporate strategy okay corporate strategy kya hota let’s check out now this is nothing but developing growth design of the firm “aap kaise aage bado gay” correct towards achievement of your goal your path you can call it as a corporate strategy is basically the growth designs of the firm which spells out the growth objective direction, extent, pace and timing of firms growth so when who is supposed to do what for achievement of growth that is corporate strategy right kids do Remember now strategies are not perfect correct ya possible or flawless they are not suitable for sound, alert and responsible management. Discuss, now this can be question that you can expect in your examination now this true because finally it’s been made or developed by people working in the organization so there is a possibility that they may have some flaw in it right now strategy is the action relating to the organization and the environment in which organization is operating so they may go wrong some time. It helps to determine the objective of the goal of the organization you come closer to it. It decides the action required to achieve the objectives as in I told you right in the previous module that in India when head and shoulders enter the market nobody willing to buy those costly bottles of 250 rupees so they have to change the action plan and they came back with sachet to come closer to their goals or penetrate in the market. It relates to the whole organization. It affects the organization over a period of time. The strategy helps to utilize the critical resources right all those resources which are very scares so they have to see they go for optimum utilization. Strategy formulation is an correct intellectual process it’s not for everyone. It helps to identify opportunities as soon as you see some kind of an opportunity you need to grab it right kids so don’t did thing head and shoulders what they did after waiting and they suppose to withdraw at last moment they thought of that why don’t we try small, small packets ya. Strategy is always forward looking right for future not for past. It is a continues process why because the environment keeps on changing right kids that’s the reason we need keep on checking the environment in which business is operating remember that so these all the reasons right you can right for strategies are not perfect or flawless now here in let’s understand hierarchy right of organization at the top level we have corporate level

Bachha log let’s see now strategy right strategy where did we get this from the word in Greek called stratego that is act of a General in the battle field right his game plan remember kids all your movies related with army, Navy on battlefield how they act what planning they do what is that stratego in Greek and in English strategy so let’s see what Glueck has given a unified comprehensive and integrated plan design to assure that the objectives of the enterprise are achieved so bachha log this is nothing but set of tools to achieve objectives of the company that is strategy it can be anything as in let’s see out here it can be surprise yes as an example which I gave you right just in the previous module about head and shoulders wasn’t is surprising for them right yes “Ek bottle nahi but sachet ka chamatkar kiya un logo ke liye” wasn’t it true ya that is some time either you surprise them or surpass them that is also strategy examples further either it can be attack from right or may be defend or may be ambush right and even it can be surrender as and when is required so this what the general buzz either he will attack or he will defend or ambush or the surrender “Hota hai ki nahi” yes everything depends on the time period and situation need to first check out the environment right these all the competitive moves which management needs to think right for approaching closer and closer towards the business objective it may be attack, defend, ambush or surrender like a general in the battle “Hai na bachha log” now let’s see what are other things which are possible, Expansion right that is what you can expand your market you can expand your business second diversifying like ITC not only cigarettes but they are into snacks even right I hope you are aware in to hotels in to readymade garments ok even in readymade food items that is diversification.

Hi students after understanding business environment and business objective now let’s check business policy now this thing originated in 1911 at “Harvard Business School” right it was develop specifically for general management capability, later on it was been made compulsory in all management administrative causes round the globe so bachha log let see now the definition of business policy it is nothing but a set of instructions to be given now as definned here business policy “the study of functions and responsibilities of senior management, the crucial problem that affect the success in the total enterprise, and the decisions that determine the directions of the business organisation and shape its future” now this is the definition for business policy what it means we need to think on how we can change and achieve our business objectives for that reason we study business policy. Right its very very important from the point of view of achieving objective now policy is guideline for decision making, determines the broad framework with in which managers have to function or work right or take some decisions, policies help decision making for repetitive or recurring situations. Now here in I am reminded of and example right some aound in 2000 when “Head and Shoulder’ entered for the first time in the Indian market they came up with bottels of 250 rupees wo zamane mein 2000 ke saal mein do you belive that Indians will spend 250 rupees for shampoo No now this company tried have number of different things but later on they felt after 12 months we are not able to crack this market right so they changed their policy right and they develop small small sachets after how long after spending 12 months in the market right Indian market and once they came into small small sachets of 1 rupee and as you are aware India is having a population of Right “To sab log agar ek ek sachet bhi karidtte hai” you imagine right the turn over for that particular company Yes that is business policy right so “Areas” now remember that HUL right very very sharp and smart company in marketing so their business policies are very very good right even financial policies cash or may be credit, production always quality purchases, R&D similarly all the companies from Japan like Sony, Toyota, Honda all these companies they spend lot of money in research and development thats their business policy so that they come closer and closer to their objectives right kids so purchases stock levels every thing is checked properly by these companies HR, promotions, recruitment they have the awesome policies for all such things. Now lets check the present status

Today irrelevant evironmet changes as I told you previously “Head and Shoulder” right was totally a disaster why 250 rupees for a bottel of 100 ml nobody would like to buy such a product in India. We dont spend so much, so what was the next option for them to come down to sachets of one one rupee, so demands critical look