The document provides an overview of Part 1 of a session on strategy in strategic human resource management. Part 1 aims to provide an understanding of organizational strategy, including the role of strategy, different types of strategy, value propositions, and organizational lifecycles. It discusses key strategy concepts and tools such as Porter's five forces analysis and the generic business strategies of cost leadership, differentiation, and focus. Examples are provided of companies like Walmart, Krispy Kreme, and Kodak to illustrate different strategic approaches. The document emphasizes aligning HR practices with business strategy to achieve organizational goals.

1. STRATEGY IN STRATEGIC HRM: PART 1
Anilesh Seth
Ideator, Co Founder & CEO, KROW
www.krow.in
Ex-CEO/MD: LGSI, Qatalys & Supervalu India
www.slideshare.net/anilesh
http://In.linkedin.com/in/anileshseth
anileshseth@hotmail.com

2. Part 1: Sessions 1 & 2
• Objective of these sessions is to enable an
understanding of strategy and associated
terms and tools to serve as a foundation to
segue into Strategic HRM
• Content of Part 1: Overview of organizational
strategy – role of strategy, understanding of
types of strategy through case studies and
examples, value proposition and organization
life-cycle

3. • July 27, 2012 News ….”Samsung completely
destroyed Apple in smartphone shipments
Last Quarter”
• Samsung passed Nokia to become the top
manufacturer for handsets overall
• Samsung “shipped” over 50 million
smartphones in the second quarter
• Apple “sold” 26 million

4. • July 27, 2012 News ….”Samsung completely destroyed
Apple in smartphone shipments Last Quarter”
• Samsung passed Nokia to become the top
manufacturer for handsets overall
• Samsung “shipped” over 50 million smartphones in the
second quarter
• Apple “sold” 26 million
Assignment: Do desk research on both companies and
identify what each company is doing to ensure the no 1
slot. Are these sustainable? Pick a position on who will
succeed. Output: Powerpoint – Max 4 slides.
????

5. So what is Strategy?

6. So what is Strategy?
“Strategy is the direction and scope of an
organization over the long-term; which achieves
advantage for the organization through its
configuration of resources within a challenging
environment, to meet the needs of markets and
to fulfill stakeholder expectations”

7. What the gurus say….
• Michael Eugene Porter
(1996) Competitive
strategy is about being
different. It means
deliberately choosing a
different set of activities to
deliver a unique mix of
value

8. Porter’s five forces analysis
• This is a framework used for evaluating a
company’s competitive position
http://www.maxi-pedia.com/Five+Forces+model+by+Michael+Porter

9. What the gurus say….
• Kenichi Ohmae
The 3Cs Model
Reference: http://www.lacpa.org.lb/Includes/Images/Docs/TC/TC278.pdf

10. What the gurus say….
• Gary Hamel and CK Prahlad
“To achieve success the
company should connect its
ends to its means through
Strategic Intent”. This has 3
attributes:
– Sense of direction
– Sense of discovery
– Sense of destiny

11. The military viewpoint
• Deals with the planning and conduct of campaigns, the
movement and disposition of forces and the deception of
the enemy
• “In peace, prepare for war, in war, prepare for peace. The
art of war is of vital importance to the state (512 BC)”

12. Some common threads
• The future….
• Customers….
• Competition….
• Competitive advantage….
• Entry barriers….
• Innovation….
• Marshaling resources….
A great starting point is asking the questions:
- Where are we now?
- Where do we want to go?
- How do we get there?
“If one does not know to which port one is sailing, no wind is favorable.”
Lucius Annaeus Seneca…Roman Philosopher (born 5 BC)

13. Porter’s generic business strategies

14. Cost leadership example: Wal-Mart
• Wal Mart was founded in 1962 by Sam Walton
• Rigorously pursued its core philosophy of cost-leadership
• Sam realized that retailing was a volume driven business and success
would be achieved by offering customers better value for their money
• Started by establishing discount stores in smaller towns
• 1970s – it went national. Opened its first distribution center
• 1980s – opened up the first SAM’s club. 276 stores
• 1990s – EDLP went international. 1997 crossed 100 billion USD
• 2000s – offering customers a seamless shopping experience – online, in
store or on a mobile device. 2010 – Bharti Walmart in India
• 2012 – 50 years of helping people save money so they can live better.
Employs 2.2 million associates worldwide, 200 million customers each
week in 10,000 stores in 27 countries
• As of Jan 2012 it had revenues of 447 billion after Exxon and Royal Dutch
Shell

15. How did Wal-Mart achieve this?

16. How did Wal-Mart achieve this?
• Warehousing and distribution System: strategically
located distribution centers, cut overheads, reduce
costs
• Inventory: As low as possible by tightly controlling
supplier on-time delivery
• EDLP
• Overseas outsourcing: Online and direct access to low
cost foreign suppliers
• Supplier control: Encourages suppliers to keep reducing
costs, update computer systems, redesign
packaging, examine financial accounts and ask them to
cut margins etc

17. Product and service differentiation
• Product differentiation
– Features Example:
– Manufacturing process Cervelo – aerodynamic race bikes
“Speed, Engineered”
– Performance BMW – the ultimate driving machine
– Design
• Service differentiation
Example:
– Speed of delivery Enterprise rent a car
– Availability “We’ll pick you up”
– Loyalty programs
– After sales service and training
– Warranty
Combination: Dominos pizza: New product intros with 30 minute guarantee

18. Differentiation example: Krispy Kreme
• Specialty retailer of premium-quality doughnuts
• Started in 1937 – went IPO in 2000
• First international store in Canada in 2001
• Now in Sydney, London, Mexico, Puerto
Rico, Turkey
• Plans to open up 80 stores in Southern India and
Western India in next 5 years
• Revenue about 13.5 billion USD

19. Krispy Kreme – some elements of their
strategy
• “It isn’t about what’s inside the doughnut but what's inside a customer’s
head”
• Opinions are:
– The Michelangelo of doughnut makers
– It is an art
– Heavenly inspired
• Loyalists are wait in line for hours on the opening day of a new unit – they
camp out 24 hrs in advance!
• Created a cultural icon and built customer pride
– Exhibit at the Smithsonian National Museum of American History
– The Doughnut Theatre – watch them being made
– Doughnut of the month
– Website: Friend of Krispy Kreme – make customers feel they are part of the
company
– Collectibles (shirts, boxers, shorts, mugs, hats etc.)

20. Types of business level strategy
Cost Efficient supply chain
leadership
Caters to a niche, Porter’s 4 Customer service,
Example Kopi Luwak
Example Breeze Resorts
Differentiation
focus generic Differentiation quality, convenience,
strategies
Low-cost focus
Lowest provider for a niche market
Example: Redbox for DVD rentals
Foundational elements:
- Customer intimacy – this involves a high level of investment in understanding customers
- Product innovation

21. Strategy vs Tactics
• A strategy is a market Example: Hyundai Motor Corporation’s
based move that expenditures on R & D and plant expansion
involves a significant to become one of the world’s largest car-makers
commitment of by 2010 and sell one million units annually in the
organizational US
resources and is
difficult to
implement and
reverse
• A tactic is a market Example: Hyundai Motor Corporation’s
based move that is US pricing strategy
taken to fine-tune a
strategy

22. Strategy vs Tactics

23. What is this “Vision thing”?
• Vision
– Long term, encouraging, aspiration for the future
– Must be in line with corporate values

24. What is this “Vision thing”?
• Vision
– Long term, encouraging, aspiration for the future
– Must be in line with corporate values
Boeing (1950):
Become the dominant player in commercial aircraft and bring the world into
the jet age
Boeing (2016):
People working together as a global enterprise for aerospace leadership
Microsoft (1980):
A personal computer in every home running Microsoft software
Microsoft (Steve Balmer):
Enabling people and businesses to realize their full potential
Reading: Marketing Myopia: http://hbr.org/2004/07/marketing-myopia/ar/1
Assignment: Research the vision statements of at least one successful start up and one
established Indian corporate. Find out if this has changed over the years

25. Organization life-cycle
Likely to mirror industry maturity
Can apply SWOT/Porter’s 5 forces
at each stage – it will be different
Ref: http://www.product-arts.com/articlelink/1246-company-evolution-a-the-organizational-life-cycle

26. The KODAK case study
• In Jan 2012, the 131 year old film pioneer filed for bankruptcy
• Since 2004, they reported only one year of full profit
• Kodak appears to have fallen to undercutting of prices by
companies like Fujifilm and then the onset of digital technologies.
Kodak actually halted investment in film in 2003
• Kodak’s turnaround strategy has the following components:
– Creation of a digital business
– Exiting traditional operations – closing 13 plants and 130 labs
– Workforce reduction by 47,000 since 2003
– Reducing cost-structure
– Monetizing non-core IP assets (digital patents – selling and suing!)
Question: Was Kodak in business to create cameras and film or was
Kodak in business to help people capture and preserve memories?

27. Value Proposition
• A business or marketing statement that
summarizes why a consumer should buy a
product or use a service. It:
– explains how your product solves customers
problems or improves their situation
– delivers specific benefits (quantified value)
– tells the customer why they should buy from you
and not from the competition (unique
differentiation)
– should be simple and concise
Check out this video:
http://www.youtube.com/watch?v=VZ5rgVgn5qk

28. More about value propositions
• Example of what it should *not* be:
Revenue-focused marketing automation & sales
effectiveness solutions unleash collaboration with
customers and internal departments throughout
the revenue cycle
• Caution not to mix them up with slogans like:
“L’Oréal. Because you’re worth it”

29. Example of a good value proposition

30. Example of a good value proposition

31. Connecting some dots….
What is “Strategic” HRM?
Discussion: Who “manages” employees – HR or Managers?

32. What is strategic HRM?
• Strategic HRM is the practice of aligning business
strategy with that of HR practices to achieve the
strategic goals of the organization
• This meshes with the values of a company and
can manifest itself in ways such as innovation
leadership or outstanding customer service
• This demands a proactive and hands on approach
by the management as well as the HR
department
• The HR department’s role here is more of
“facilitation”

33. Essential elements of strategic HRM
• Internally transforming
HR staff and structure
• Enhancing administrative
efficiency
• Integrating HR into the At the core is ensuring that
strategic planning a company’s Human Resources
process are a source of key Competitive
• Linking HR practices to advantage
business strategy and to
one another
• Developing a partnership
with line management

34. Example: Use of tools as an enabler of
change management
• The ADKAR model
Awareness ..of the need for change
Desire ..to support and participate in
the change
Knowledge ..of how to change
Ability ..to implement required skills
and behaviours
Reinforcement ..to sustain the change
Source: ADKAR, A model for change in business, government and our community
- Jeffrey M. Hiatt

35. Case: The need to downsize……
5
4
3 Barrier
Point
2
1

36. The Strategic Management Process
Strategic
Analysis
Strategy
Development
Strategy
Implementation

37. Reference books
• Competitive Strategy: Techniques for Analyzing Industries and Competitors
– Michael Porter
• Competitive Advantage: Creating and Sustaining Superior Performance
– Michael Porter
• Cases in Competitive Strategy
– Michael Porter
• Strategy Maps
– Kaplan & Norton
• What Matters Now
– Gary Hamel
• Strategic Flexibility
– Gary Hamel, C K Prahlad, Howard Thomas, Don O’Neal
• Competing for the Future
– Gary Hamel, C K Prahlad
• Strategic Management
– Hitt, Ireland, Hoskisson

38. Thank you!