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Non Store Retailing

Non Store Retailing Meaning
The selling of goods and services without establishing a physical store is known as Non-Store Retailing. It includes such services as vending machines, direct-to-home selling, telemarketing, catalog sales, mail order, and television marketing programs.The fast growing method used by retailers to sell products is through methods that do not have customers physically visiting a retail outlet. In fact, in many cases customers make their purchase from within their own homes.A large majority about 80% of retail transactions are made in stores. However, a growing volume of sales is taking place away from stores. It is estimated that non-store sales account for almost 20% of total retail trade.

Types Of Non Store retailing Format

Types of Non Store Retail Format:Following are the six types of non store retailing: 

1. Direct selling, 
2. Tele marketing,
3. Online retailing, 
4. Automatic vending,
5. Direct marketing, and
6. Electronics retailing.

Direct Selling:

Direct selling is also defined as personal contact between a sales person and a consumer away from a retail store. This type of retailing has also been called in home selling. Annual volume of direct selling in India is growing fast from the beginning of the 21st century.Like other forms of non-store retailing, direct selling is utilized in most countries. It is particularly widespread in Japan, which accounts for about 35% of the worldwide volume of direct selling. 

• The U.S. represents almost 30% of the total and all other countries the rest. The two kinds of direct selling are Door to door Party planDirect retailing originated several centuries ago and has mushroomed into a $9 billion industry consisting of about 600 companies selling  HYPERLINK " http://www.britannica.com/EBchecked/topic/169273/door-to-door-sale" o " door-to-door" door-to-door, office-to-office, or at private-home sales meetings. 
• The forerunners in the direct-selling industry include The Fuller Brush Company (brushes, brooms, etc.), Electrolux (vacuum cleaners), and Avon (cosmetics).
•  In addition, Tupperware pioneered the home-sales approach, in which friends and neighbors gather in a home where Tupperware products are demonstrated and sold. Network marketing, a direct-selling approach similar to home sales, is also gaining prevalence in markets worldwide. 
• Network marketing companies such as Amway and Shaklee reward their distributors not only for selling products but also for recruiting others to become distributors. In 2007, Amway’s parent company tested an Internet recruitment model by launching Fanista, a Web site that sells entertainment media such as books, movies, and music, while rewarding users for bringing other customers to the site Reasons for the growth in direct marketing:

Advantages of Direct Selling:

• Consumers have the opportunity to buy at home or at another convenient Non-Store location that provides the opportunity for personal contact with a sales person.
• For the seller, direct selling offers the boldest method of trying to persuade ultimate consumers to make a purchase.
• The seller takes the product to the shopper’s home or work place and demonstrates them for the consumer.

Limitations of Direct Selling: 

Sales commissions run as high as 40 to 50%of the retail price; of course, they are paid only when a sale is made.

Recruiting sales people most of whom are part timers are difficult tasks.Some sales representatives use high pressure tactics or are fraudulent.

Telemarketing:

Sometimes called telephone selling, telemarketing refers to a sales person initiating contact with a shopper and closing a sale over the telephone. 

• Telemarketing many entail cold canvassing from the phone directory. Many products that can be bought without being seen are sold over the telephone. Examples are pest control devices, magazine subscriptions, credit cards and cub memberships.
• Telemarketing is not a problem free retailing. Often encountering hostile people on the other end of the line and experiencing many more rejections than closed sales, few telephone sales representatives last very long in the job. 
• Further some telemarketers rely on questionable or unethical practices. For instance firms may place calls at almost any hour of the day or night. This tactic is criticized as violating consumers' right to privacy. 
• To prevent this, some states have enacted rules to constrain telemarketers' activities.Despite these problems, telemarketing sales have increased in recent years. Fundamentally, some people appreciate the convenience of making a purchase by phone.
•  Costs have been reduced by computers that automatically dial telephone number, even deliver a taped message and record information the buyer gives to complete the sale. 
• The future of telemarketing is sure to be affected by the degree to which the problems above can be addressed and by the surge of online retailing.

Advantages and disadvantages of tele marketing

• There are many advantages and disadvantages of telemarketing. Telemarketing is a somewhat stressful career choice. It really depends on what type of telemarketing that you do. Collection call telemarketing can be one of the worst telemarketing jobs that you can have. No matter which path of telemarketing you take you will run into a lot of rude people. Everybody knows that people do not like to get interrupted by telemarketers at home. When I see a telemarketer call or when I hear a pause on the line, I hang up the phone. 
• You can do telemarketing from home. Usually companies will pay you at least ten dollars an hour to do this from your home. 
• One company that hires telemarketers is known as BabyToBee. This job is better than your average telemarketing companies because you are calling expectant mother and fathers and offering them baby coupons. Usually these people sign up on the website to receive these things and they are happy to hear from you. 
• It's probably one of the only telemarketing jobs that people will be excited to talk to you.As with any telemarketing company you will run into dead leads such as people sign up and can't remember or they never signed up. 
• With a lot of companies it has been a long time since they signed up for whatever it was they were looking to get.
•  The best way to have a successful call is to establish a rapport with your parent. If they trust you and you are friendly they will be more likely to end the call with you on a good note. With telemarketing you cannot get upset with people who call you names and hang up on you. 
• Telemarketing allows you to stay at home and work which means that you save on gas money and other things. 
• You can wake up and sign on whenever you choose to, as long as you get the hours in that are required. All you need for telemarketing is a computer with an internet connection and some type of headset which has a built in microphone.
•  You can purchase a headset from Best Buy or an electronics store for around $30.00. It's not one of these jobs where you need to purchase $300 worth of things to get started working from home. 
• It allows you to stay at home and have a flexible schedule.

Online retailing

Online Retailing:When a firm uses its website to offer products for sale and then individuals or organizations use their computers to make purchases from this company, the parties have engaged in electronic transactions (also called on line selling or internet marketing). 

• Many electronic transactions involve two businesses which focus on sales by firms to ultimate consumers. Thus online retailing is one which consists of electronic transactions in which the purchaser is an ultimate consumer.
• Online retailing is being carried out only by a rapidly increasing number of new firms, such as Busy.com, Pets Mart and CD Now.com. 
• Some websites feature broad assortments, especially those launched by general merchandise retailers such as Wal-mart and Target. 
• Some Internet only firms, notably Amazon.com are using various methods to broaden their offerings.Whatever their differences, e-retailers are likely to share an attribute. They are unprofitable or best, barely profitable. 
• Of course, there are substantial costs in establishing an online operation. Aggressive efforts to attract shoppers and retain customers through extensive advertising and low prices are also expensive. The substantial losses racked by online enterprises used to be accepted, perhaps even encouraged by investors and analysts. 
• The rationale was that all available funds should be used to gain a foothold in this growing market.Despite these challenges, online retailing is expected to grow, rapidly and significantly for the foreseeable future. Online sales represented about 1% of retail spending in 2005, but one research firm estimates that consumer purchases on the Internet with triple by the year 2010.
• Which product categories are consumers most likely to buy on the Internet in the future? Consumers' shopping intentions in 2005 placed the following goods and services at the tope of the list: books, music and videos, computer hardware and software, travel and apparel. 
• Of course, given that change on the Internet occurs, these categories soon may be surpassed by others - perhaps groceries, toys, health and beauty aids, auto parts or pet supplies.

Advantages of Online retailing

• Bargaining power of consumers. 
• They enjoy a wider choice Supplier power. 
• It is more difficult for consumers to manage a non-digital channel.Internet increases commoditization.
• Threat of new entrants. 
• Online means it is easier to introduce new services with lower over-heads T
• Threat of substitutes Rivalry among competitors. It is easier to introduce products and services to different markets 

Automatic Vending

The sale of products through a machine with no personal contact between buyer and seller is called automatic vending. The appeal of automatic vending is convenient purchase. 

• Products sold by automatic vending are usually well-known presold brands with a high rate of turnover. The large majority of automatic vending sales comes from the 
• " 4 C's" : cold drinks, coffee, candy and cigarettes.
• Automatic vending is a unique area in non-store merchandising because the variety of merchandise offered through automatic vending machines continues to grow. Initially, impulse goods with high convenience value such as cigarettes, soft drinks, candy, newspapers, and hot beverages were offered. 
• However, a wide array of products such as hosiery, cosmetics, food snacks, postage stamps, paperback books, record albums, camera film, and even fishing worms are becoming available through machines.

Advantages and disadvantages:
Vending machines can expand a firm's market by reaching customers where and when they cannot come to a store.

•  Thus vending equipment is found almost everywhere, particularly in schools, work places and public facilities.
•  Automatic vending has high operating costs because of the need to replenish inventories frequently. 
• The machines also require maintenance and repairs.

Future Aspects of vending machines

The outlook for automatic vending is uncertain. 

• The difficulties mentioned above may hinder future growth.
•  Further, occasional vending-related scams may scare some entrepreneurs away from this business.
• Vending innovations give reason for some optimism. 
• Debit cards that can be used at vending machines are becoming more common. 
• When this card is inserted into the machine, the purchase amount is deducted from the credit balance. Technological advances also allow operators to monitor vending machines from a distance, thereby reducing the number of out-of-stock or out-of-order machines.

Direct Marketing

Direct Marketing:T

here are no consumers on the exact nature of direct marketing. 

• In effect, it comprises all types of non-store retailing other than direct selling, telemarketing, automatic vending and online retailing.
•  In the context of retailing, it has been defined as direct marketing as using print or broadcast advertising to contact consumers who in turn, buy products without visiting a retail store.
• Direct marketers contact consumers through one or more of the following media: radio, TV, newspapers, magazines, catalogs and mailing (direct mail). 
• Consumer orders by telephone or mail.
•  Direct marketers can be classified as either general - merchandise firms, which offer a variety of product lines, or specialty firms which carry - only one or two lines such as books or fresh fruit.Under the broad definition, the many forms of direct marketing include:
• Direct mail - in which firms mail letters, brochures and even product samples to consumers, and ask them to purchase by mail or telephone.Catalog retailing - in which companies mail catalogs to consumers or make them available at retail stores

Advatages of direct marketing

Advantages of Direct Marketing:

• Direct marketing provides shopping convenience. 
• In addition, direct marketers enjoy comparatively low operating expenses 
• because they do not have the overhead of physical stores.

Disadvantages

Consumers must place orders without seeing or touching the actual merchandise. 

• To off-set this, direct marketers must offer liberal return policies. Furthermore, catalogs and to some extent, direct mail pieces are costly and must be prepared long before they are issued. 
• Price changes and new products can be announced only through supplementary catalogs orbrochures.
• Direct marketing's future is difficult to forecast, given the rise of the Internet.
• The issue is whether or not firms relying on direct marketing can achieve and sustain a differential advantage in a growing competition with online enterprises.

E-Retailing

Internet Retailing or e-retailing as is usually referred to as covers retailing using a variety of different technologies or media. It may be broadly be a combination of two elements. 

• Combining new technologies with elements of traditional stores and direct mail models using new technologies to replace elements of stores or direct mail retails. Internet retail also has some elements in common with direct mail retailing.
•  For example, e-mail messages can replace mail messages and the telephone, that are used in the direct mail model as means of providing information, communication and transactions while on-line catalogues can replace printed catalogues. 
• As with direct mail businesses, critical success factors include:
• (i) Use of customer databases
• (ii) Easy ordering
• (iii) Quick DeliveryOperational 
• elements that the Internet retail model shares with both the retail store and direct mail models include:
• (i) Billing of customers
• (ii) Relationships with supplier
• There are, therefore, many elements that Internet retail and more traditional retail models have in common. Indeed many of the most successful Internet retailers have been those that have been able to successfully transfer critical elements from traditional retailing to the Internet, such as customer service and product displays.E-Retailing in India:Bottlenecks Faced By E-Retailing in India: 
• (1) Problems with the Payment SystemPeople in India are not used to the online shopping system and moreover the online payment system through the credit card is also totally alien to them. Most of them do not avail of the transaction facilities offered by the credit cards. They are also dubious regarding the online payment system through the credit cards. Hence different payment options should be made available to them like the credit card, cash on delivery and net banking to give them further assurance. 
• (2) Problems with Shipping: The customers using the online shopping channel should be assured that the products that they have ordered would reach them in due time. For this the retail companies have resorted to private guaranteed courier services as compared to postal services. 
• (3) Offline presence:The customers should be assured that the online retailers are not only available online but offline as well. This gives them the psychological comfort that these companies can be relied upon. 
• (4) Products offered at discounted rates:The online retailers save on the cost of building and employee salaries. Some part of this benefit should also be enjoyed by the online customers by a reduction in the price of the product. The customers should be conveyed this message that they are getting the products at a discounted price. 
• (5) Language Problem:Most internet retail shops use English as their mode of communication. English may not be comprehensible to the majority of the Indian population. To increase the customer base, content in the online retail shops should be provided in local language. Another reason why the concept of e- retailing or online retailing has not gained prominence in India is that the Indians prefer to touch the products physically before buying them. This facility is provided through the multi-brand outlets, not available online. Studies have revealed the preferences of the customers towards the traditional shopping methods. Hence the retailer online should first make it a point to spot the potential customers and accordingly plan out the product. If the customers are more open to online shopping, then nothing can be more beneficial. They save the time and effort to visit, departmental stores, shopping malls, etc. products can be delivered by a click of the mouse.Precautions to be taken during Online Shopping:Shopping online offers lots of benefits that you won't find shopping in a store or by mail. The Internet is always open — seven days a week, 24 hours a day — and bargains can be numerous online. With a click of a mouse, you can buy an airline ticket, book a hotel, send flowers to a friend, or purchase your favorite fashions. But sizing up your finds on the Internet is a little different from checking out items at the mall.If you're buying items from an online retailer or auction website, 
• following are the advice to help you make the most of your shopping experience
• 1)Know who you're dealing with: Anyone can set up shop online under almost any name. Confirm the online seller's physical address and phone number in case you have questions or problems. If you get an email or pop-up message while you're browsing that asks for financial information, don't reply or click on the link in the message. Legitimate companies don't ask for this information via email.
• (2) Know exactly what you're buying: Read the seller's description of the product closely, especially the fine print. Words like " refurbished," " vintage," or " close-out" may indicate that the product is in less-than-mint condition, while name-brand items with " too good to be true" prices could be counterfeits.
• (3) Know what it will cost:Check out websites that offer price comparisons and then, compare " apples to apples." Factor shipping and handling — along with your needs and budget — into the total cost of the order”. Do not send cash under any circumstances.
• (4)Pay by credit or charge card: If you pay by credit or charge card online, your transaction will be protected by the Fair Credit Billing Act. Under this law, you have the right to dispute charges under certain circumstances and temporarily withhold payment while the creditor is investigating them. In the event of unauthorized use of your credit or charge card, you generally would be held liable only for the first $50 in charges. Some companies offer an online shopping guarantee that ensures you will not be held responsible for any unauthorized charges made online, and some cards may provide additional warranty, return, and/or purchase protection benefits.
• (5) Check out the terms of the deal, like refund policies and delivery dates: Can you return the item for a full refund if you're not satisfied? If you return it, find out who pays the shipping costs or restocking fees, and when you will receive your order. A Federal Trade Commission (FTC) rule requires sellers to ship items as promised or within 30 days after the order date if no specific date is promised.
• (6)Keep a paper trail: Print and save records of your online transactions, including the product description and price, the online receipt, and copies of every email you send or receive from the seller. Read your credit card statements as you receive them and be on the lookout for unauthorized charges.
• (7) Don't email your financial information: Email is not a secure method of transmitting financial information like your credit card, checking account, or Social Security number. If you initiate a transaction and want to provide your financial information through an organization's website, look for indicators that the site is secure, like a lock icon on the browser's status bar or a URL for a website that begins " https:" (the " s" stands for " secure" ). Unfortunately, no indicator is foolproof; some fraudulent sites have forged security icons.
• (8) Check the privacy policy: It should let you know what personal information the website operators are collecting, why, and how they're going to use the information. If you can't find a privacy policy — or if you can't understand it, consider taking your business to another site that's more consumer-friendly.How to Report if You Have Been a Victim of an Online Shopping Fraud:If you have problems during a transaction, try to work them out directly with the seller, buyer or site operator. If that doesn't work, file a complaint with:The attorney general's office in your state.Your county or state consumer protection agency. Check the blue pages of the phone book under county and state government.The Better Business Bureau.The FTC

Future Expectation/Growth of Non-store retailing:

Non-store retailing grew at a much faster rate than store-based retailing during the review period. While direct seller Amway embarked on an aggressive brand campaign in 2008, it was Internet retailing which drove growth, riding on increasing Internet penetration, the reduced cost of Internet access, and greater familiarity with on-line purchasing

• .With some market observers predicting that by the year 2000 non-store retailing will handle 30 percent of all general merchandise sold, non-store channels may become a powerful force in the retailing industry. This graph represents that the importance and the share of the retail online sales is increasing at an increasing rate. It also signifies that with the time constraint coming in the life-style of many buyers the non-store based retailing and e-tailing will be the core of the retailing business around the world in near future. 

Strategic Marketing Mgt

Corporate Strategy Planning

Introduction

following on from these definitions:

• A corporate strategy is the set of management decisions – designed by executives, the board, senior management team or whoever are the final decision makers in the organisation – that are meant to get the better of adversaries or attain the organisations ‘ends’.
• Tactics are the plans or procedures that they adopt to implement these strategic decisions.

Who is Michael Porter?

Amongst the most significant authors on strategy of recent decades is the Harvard academic, business guru, strategist and author, Michael Porter (1947-).

As well as developing a number of specific tools and frameworks for analysis, Porter highlighted that the purpose of strategy was to gain and defend some form of competitive advantage – which in our definition of strategy fits quite neatly with the idea of “getting the better of an adversary”.

Porter said in his groundbreaking books in 1980 (Competitive Strategy) and 1985 (Competitive Advantage) that these are really only three forms of competitive advantage:

1. Cost Leadership – having lower costs than any other competitor enables either superior profits or a capacity to offer lower prices.

2. Differentiation – being able to offer customers something different to anyone else in the market, as long as it is something that customers value and will prefer.

3. Focus – being acknowledged as a specialist and having expertise and knowledge of particular customers or activities and processes that are highly prized.

So, from Porter’s perspective, the purpose of a corporate, business unit or functional strategy would be to develop, refine, defend and exploit one of these three sources of competitive advantage.

What are the different levels of strategy?

Strategy can be developed at many levels – in a multi-layered organisation there may be:

• Corporate level strategy – decisions made for the whole corporation or organisation to gain the better of adversaries or attain ends.
• Business unit or divisional strategy – decisions made for the business unit or division to gain the better of adversaries or attain the business units end.
• Functional strategies – such as marketing/finance/human resources/IT/technology/ operational/production/etc. strategies. There would be marketing decisions (or finance or HR decisions, etc) designed to get the better of an adversary or attain a marketing/finance, etc, end.

So what do we mean by ends? Other terms that are frequently used here for the same concept are goals or missions or visions.

Organisations typically have (or should have) a set of goals, desired outcomes or a view of their purpose (mission), or their future achievements and positions (visions) in mind. Ideally these are clearly articulated and understood by everyone in the organisation. When these ends (goals, mission, vision) are clearly understood, then the board, management, staff and partners

Process of Corporate Strategy

Goal-Setting

The purpose of goal-setting is to clarify the vision for your business. This stage consists of identifying three key facets: First, define both short- and long-term objectives. Second, identify the process of how to accomplish your objective. Finally, customize the process for your staff, give each person a task with which he can succeed. Keep in mind during this process your goals to be detailed, realistic and match the values of your vision. Typically, the final step in this stage is to write a mission statement that succinctly communicates your goals to both your shareholders and your staff.

Analysis

Analysis is a key stage because the information gained in this stage will shape the next two stages. In this stage, gather as much information and data relevant to accomplishing your vision. The focus of the analysis should be on understanding the needs of the business as a sustainable entity, its strategic direction and identifying initiatives that will help your business grow. Examine any external or internal issues that can affect your goals and objectives. Make sure to identify both the strengths and weaknesses of your organization as well as any threats and opportunities that may arise along the path.

Strategy Formulation

The first step in forming a strategy is to review the information gleaned from completing the analysis. Determine what resources the business currently has that can help reach the defined goals and objectives. Identify any areas of which the business must seek external resources. The issues facing the company should be prioritized by their importance to your success. Once prioritized, begin formulating the strategy. Because business and economic situations are fluid, it is critical in this stage to develop alternative approaches that target each step of the plan.

Strategy Implementation

Successful strategy implementation is critical to the success of the business venture. This is the action stage of the strategic management process. If the overall strategy does not work with the business' current structure, a new structure should be installed at the beginning of this stage. Everyone within the organization must be made clear of their responsibilities and duties, and how that fits in with the overall goal. Additionally, any resources or funding for the venture must be secured at this point. Once the funding is in place and the employees are ready, execute the plan.

Evaluation and Control

Strategy evaluation and control actions include performance measurements, consistent review of internal and external issues and making corrective actions when necessary. Any successful evaluation of the strategy begins with defining the parameters to be measured. These parameters should mirror the goals set in Stage 1. Determine your progress by measuring the actual results versus the plan. Monitoring internal and external issues will also enable you to react to any substantial change in your business environment. If you determine that the strategy is not moving the company toward its goal, take corrective actions. If those actions are not successful, then repeat the strategic management process. Because internal and external issues are constantly evolving, any data gained in this stage should be retained to help with any future strategies.

What is a strategic plan?

A plan, whether strategic, tactical, operational, marketing, finance – or whatever – is really just a set of decisions that have been captured in some form (document, web page, PowerPoint presentation, video, etc) that set out the answer to three key questions:

1. Where are we now?

2. Where are we going?

3. How will we get there?

Accordingly, a plan is formed by:

• Analyzing the existing and expected future trends and factors affecting the organisation/business unit, etc
• Setting down clear statements of the outcomes that will help to achieve the ends that the organisation has set itself (these statements of outcomes are commonly called objectives)
• Describing some tactics and actions that will lead to achieving the outcome.

Strategic Intent

Strategic Intent : 

• Strategic Intent Like individuals, organizations must define what they want to do and why they want to do this. 
• This “why they want to do” underlies the end result that is likely to be achieved through what they want to do. In management literature, this end result is referred to as strategic intent. 
• Strategic Intent has a hierarchy – vision, mission, and goals & objectives. Strategic intent is defined as “Strategic intent envisions a desired leadership position and establishes the criterion the organization will use to chart its progress.”

Attributes of Strategic Intent : 

• Attributes of Strategic Intent Sense of Direction : Strategic Intent implies a particular view about long-term market or competitive position that an organization hopes to build in future.
•  It should be a view of the future – conveying a sense of direction. 
• Sense of Discovery : Strategic intent is differential as each organization differs from others; it implies a competitively unique point of view about the future. 
• It holds out to employees of exploring new competitive territory. Sense of Destiny : Strategic intent has an emotional edge to it. It is an end result that employees perceive as inherently worthwhile.

Strategic Intent of Reliance Industries :

Strategic Intent of Reliance Industries Dhirubhai Ambani, promoter of RIL, started a business of exporting rayon, cashew nuts, and spices and importing nylon in 1959 with a meager capital of Rs. 15,000/-. This business grew and he established a synthetic fabric mill in 1966. This mill was upgraded continuously and by 1975, it was rated as one of the best mills in India by a team of World Bank. Afterward, it went for backward integration at successive levels and, today, it has become a petrochemical company and has occupied number one position in Indian Provate sector.

Strategic Intent of Reliance Industries : 

Strategic Intent of Reliance Industries In 1970s, Dhirubhai Ambani told one of his close colleagues, “do you know who these Tatas and Birlas are? We have to get past them one day. I have inherent desire to become number one industrialist of the country. This intent of Dhirubhai became the strategic intent of RIL. RIL pursued its growth strategy relentlessly. RIL always believed, “If you want to become world-class company, you must have world-class technology and world-class people. For world-class technology, RIL acquired best-in-class technology. For people mobilization, RIL adopted the approach, “If you are a big fish, small pond will not suit you. Come and join the best-in-class company”. The result is: RIL has a very high percentage of Indian repatriate employees. For mobilizing financial resources, RIL relied on public participation.

Hierarchy of strategic Intent : 

Hierarchy of strategic Intent

Vision 

Mission 

Goal

Objective

Strategic Intent of Indian Oil Corporation : 

• Strategic Intent of Indian Oil Corporation IOC is the largest Indian company engaged in the business of crude oil refining and offers a variety of products related to oil sector. 
• IOC’s strategic intent consists of the following elements in the order given below: Vision : IOC aims to achieve international standards of excellence in all aspects of energy and diversified business with focus on customer delight through quality products and services. Mission : Maintaining national leadership in oil refining, marketing, and pipeline transportation. 
• Objectives : Focusing on cost, quality, customer care, value addition, and risk management.

Vision : 

• Vision Burt Nanus, a well-known expert of organizational vision, has defined vision as “a realistic, credible, and attractive future for an organization.” Realistic : A vision must be based on reality to be meaningful for an organization; it should not be merely day-dreaming but a dream to be converted into reality. Credible. A vision must be believable to be relevant to members of the organization concerned.
•  One of the purposes of a vision is to aspire those in the organization to achieve a level of excellence, and to provide direction for their actions Attractive. 
• A vision must be attractive so as to inspire and motivate organizational members. People must want to be a part of the future that is envisioned for the organization. Future. A vision is not for the present; it is for the future. Simply, a vision is not where an organization is now but where it will be in future.

Examples of Vision : 

• Examples of Vision RIL – 

To achieve global leadership in polymers, fibres and resin businesses through innovative research and technology development in materials, products, and applications through efficient, disciplined, target-oriented, and cost-effective research and development activities. 

• Infosys – To be a globally respected company that provides best of breed software solutions by best-in-class people. 
• Tata Tea – to be India’s foremost tea-based beverage company. 

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• Dihe - to provide dynamic learning environment by imparting holistic education to develop outstanding professionals and entrepreneurs who exemplify humanistic values, are socially responsible stewards and create and dissemination practitioner - oriented knowledge that will uplift society.

Role of Vision in Strategy Formulation :

• Role of Vision in Strategy Formulation Vision provides clue about where the organization is heading for in future. Since various strategies try to ensure that the organization reaches its destination, these should be in accordance with the vision. 
• Vision of an organization tries to place it in a unique position which requires unique actions. 
• These actions are defined by various strategies. 
• Since vision is a source of inspiration to organizational members and encourages them for commitment, they tend to give their full contributions in strategy formulation and implementation.

Developing a vision : 

• Developing a vision Developing a vision is like having a dream to be converted into reality in future. Following steps are relevant for development of a vision: Conducting a vision audit – to assess the current direction and momentum of the organization. 
• Targeting the vision – What are the boundaries and constraints to the vision? What must be the vision accomplish? What critical issues must be addressed in the vision?
•  Setting the vision context – identifying what the organization’s future environment might look like.
• Developing the future scenarios Generating the alternative visions Choosing the Final Vision

Mission : 

• Mission The company mission is defined as the fundamental unique purpose that sets a business apart from other firms of its type and identifies its scope of its operations in product and market terms. 
• Difference between Vision and Mission The essence of vision is forward-looking view of what an organization is to become in future, 
• mission states what the organization is and why it exists. While vision places emphasis on visionary long-term concept of the organization with very high level of achievement, mission deals mostly with how the organization will interact with various stakeholders, products/services it offers, and the way these are offered.

Mission Statement : 

Mission Statement Mission statement is the description of organizational mission. 

• Explicit mission statement is desirable as it serves the purpose of communicating to the organization’s members about the corporate philosophy, character, and image of the organization which govern their behavior in the organization. 
• Following points should be considered while preparing the mission statement: Mission should be clear, both in terms of intentions and words used. 
• It should be feasible, neither too high to be unachievable, nor too low to demotivate the people for work It should be precise but explanatory, neither too narrow so as to restrict the organization's activities, nor too broad to make itself meaningless.
•  It should be distinctive, both in terms of the organization’s contributions to the society and how these contributions can be made.

Examples: Mission Statements of : 

Examples: Mission Statements of 

• Infosys: To achieve our objectives in an environment of fairness, honesty, and courtesy towards our clients, employees, vendors and society at large." 
• Tata Tea: Achieve market and thought leadership for branded tea in India Be recognized as the foremost innovator in tea and tea based beverage solutions Drive long-term profitable growth Co-create enhanced value for all stakeholders Make Tata Tea a great place to work
•  DIHE : To provide world-class professional education in the field of management by providing high quality instructions, excellent academic and research environment which will help our young scholars to develop competencies in dealing with global complexity, emerging technologies and changes and social and cultural diversity.

Example : Tata International : 

Example : Tata International Vision : To be the “ Leading International Business Company” of the country and “International Arm” of the Tata Group, with a significant overseas reach, presence and linkages, and with focus on facilitating globalization of Tata Group’s core business. 

• Mission: Promote the Tata Brand Equity internationally. Promote internationally, products and services from the Tata Group, as also from other utility conscious Indian and overseas companies. 
• Source world-class products and services for marketing in India. Promote businesses with strong comparative advantages for the company, and upgrade the company’s strengths in the areas of technology, marketing, and finance. Identify global sources of technology, marketing, and finance and other services to facilitate strategic-alliances, joint ventures, and collaborations of Tata-group,
•  in India and overseas. Be a market driven company and continually strive to stakeholder value and satisfaction through consistent quality in all areas of our operations. Nurture and develop human resources, to enable us to undertake the challenges of leadership and innovation, in our areas of activity.

Role of Mission in Strategy Formulation : 

• Role of Mission in Strategy Formulation Organizational Mission, when clearly defined, helps strategists in formulating their strategies in the following ways: It helps in deciding the direction in which the organization proceeds. 
• The strategic actions needs to be aligned to these. It helps the organization to clarify its aspirations and those of various stakeholders. 
• It serves as a reference point in dealing with its various stakeholders within and outside the organization. I
• t helps in integrating the organization with its relevant environment by taking suitable actions the way these have been specified in the mission. It helps in integrating the various subsystems of the organization as these subsystems look at their objectives and operations in the light of organizational mission.
•  It conveys clear message about the organization to those outsiders who come in contact with it. They develop positive attitudes towards organization if they are well aware about its mission.

Components of Mission : 

• Components of Mission Organization’s Self-concept (Identity) It’s role in the industry, change agent or follower Organization’s Philosophy (Creed or ethos) Assumptions, beliefs, values, aspirations etc. 
• Organizational Image External manifestation on the basis of which society and its people create a positive or negative view about the organization Long-term Objectives Survival, growth, profitability, shareholder value Nature of Business Product/service, market segment and technology

Business Definition 

• Business Definition A business definition is a clear-cut statement of the business or a set of businesses, the organization engages in presently or wishes to pursue in future. 
• Then it prescribes the arena in which the organization will play and compete. Business can be defined along three dimensions-product, customer, and technology. However, whatever dimension is chosen for defining business, it must reflect two features: focus and differentiation.
•  Focus of business may be defined in terms of the kind of functions the business performs rather than the broad spectrum of industry in which the organization operates. Differentiation in business is how an organization differentiates itself from others so that the business concentrates on achieving superior performance in the market.

Focus in Business Definition : 

Focus in Business Definition

Examples of Business Definition : 

Examples of Business Definition

The context of defining business : 

• The context of defining business An organization has to define its business in three contexts: Customer Segment : what is our business is not determined by the producer but by the consumer….by the want the customer satisfies when he buys a product or service Who is the customer? (location, behavior, how to reach) Product : Every organization defines the business it participates in and the product it offers. What does the customer buy? Technology : Technology consists of equipment, machines, tools and other physical aspects , and sets of activities , methods, and processes used for the production and delivery of product. What does the customer consider value?

Example: Hero Honda : 

Example: Hero Honda Business Definition:

 World-class quality auto products that provide the highest level of customer satisfaction. Customer segment: Individuals who enjoy riding motorcycles with perfection, like speed, styles, and fuel economy, located across the country. 

Product : It emphasizes world-class quality auto products- presently motorcycles, leaving the scope for adding similar other products in future. Initially, it concentrated on fuel-economy and introduced CD-100 with the slogan “fill it, shut it, forget it”. Later additional features have been added. Technology: 

The JV with Honda of Japan with core competency in automobile engines provided the needed technological edge. Product-delivery and after-sales activities have been ensure through a network of dealers armed with service centers backed up by qualified technicians trained by the company.

Goals and Objectives : 

• Goals and Objectives Goals and objectives are the end results which an organization strives for. 
• There may be different ways in expressing end results like market leadership, a certain percentage increase in sales in a particular year etc. 
• These terms are used interchangeably meaning one and the same thing.

Features of Goals and Objectives :

Features of Goals and Objectives 

• SMART 
• S – Specific
•  M – Measurable 
• A – Attainable 
• R– Relevant 
• T – Time-bound
•  DUMB 
• D – Doable 
• U – Understandable
•  M – Manageable
•  B – Beneficial

Role of Objectives : 

Role of Objectives Directions for Decision Making Clear definition of objectives encourages unified planning Objectives work as a motivating force Voluntary coordination is achieved easily if the objectives are clearly specified and mutually agreed upon Performance Standards –Objectives provide standard against which performance of the organization can be measured. Basis for Decentralization Integrating Organization, Group and Individual

Factors affecting Objective Setting : 

Factors affecting Objective Setting Forces of environment (external stakeholders) Organization’s Resources (both human and non-human) and Internal Power Relationships Value System of Top Executives (Ex. - money-oriented vs. philanthropic) Awareness by Management of the past objectives

Issues in Objective Setting :

• Issues in Objective Setting Specificity ranges from generalized organizational objectives to specific individual objectives 
• Multiplicity Multiple objectives aimed simultaneously – numbers should match 

KRAs Periodicity Set for different time periods – long-term, medium-term and short-term) Reality should be based on reality of those factors which affect objective setting Quality good-which provide specific direction for action and tangible basis for performance evaluation vs. bad-which fail to do so)

Areas of Objective Setting : 

Areas of Objective Setting Growth Volume, 

• turnover, assets Profit RoI,
•  profit margin, shareholder value Marketing Market share, 
• new products, 
• new markets, customer value Employees Attracting and retaining talent, 
• benefits, HRD, IR Social Community Services,
•  Rural Development, 
• Family welfare, 
• Development of ancillary industries

• Change in Objectives Change in Aspiration level of Top Management 
• Demand for change by Stakeholders Change in Environment Change in Life-cycle of Organization

Environment Analysis

SWOT Analysis

SWOT OF INDIA

STRENGTHS

• Highly educated , skilled ,young, capable & dynamic  human resources.
• English speaking & analytical studentsWorld class business-social-spiritual –political leader, Professor, scientist, Manager-Doctor-Engineer-Civil servants etc 
• Big India Strategic position at various platforms Democracy, Big market & free media Range of emerging professional champions
• Very rich in  Natural & Living resources Biodiversity & Traditional knowledge baseDiversity vs. Ideas-Innovation-Integration.
•  Powerful spiritual strength (yoga-Ayurvada-Healing-therapy services) Geographical location (whole markets are shifting toward Asian nations) IT & Software superpower

WEAKNESS

• Lack of trained & skill work force   Small supply of specialize professional Lack of spirits of entrepreneurship, patriotism and leadership skill Lack of effective & execution framework Lack of Indian management models 
• Lack of transparency-Trust-Responsibility Lack of learning habits & Team work spirit Blindly respect anything taught by elders Poor InfrastructureCultural DifferencesFear/Uncertainity from Pakistan and china Poor Legal System Bureaucracy Poor globalsation skill

OPPORTUNITY 
Creation of global brands BPO & Call center offerings Resource Based SectorsChinese domestic & export marketLeverage relationship in Middle East markets Indian Domestic Market Growth

THREATS

• Internal competition for resources Over promise / Under deliveryRegional Geo-political uncertaintyRising Labour cost Competition from other countries
• Blinding Nationalism Corruption / Piracy / trustPolitical & religious instability Over Population

 PESTLE Analysis