Source: E-mail dt. 7 December 2011




Dr. R. Karuppasamy M.Com., MBA. M.Phil., Ph.D

Director, SNS College of Technology, Coimbatore, India.




C. Arul Venkadesh  MBA, PGDPM, (Ph.D)

Assistant Professor, Coimbatore Institute of Engineering and Technology, Coimbatore, India.





“Business, that's easily defined - it's other people's money”


~ Peter Drucker


The increase in the competition on the markets changed in the last ten years the approach to business management.  Today companies are more process-oriented than in the past; in fact, in order to reduce the costs and keep pace with the market, they are adopting an end-to-end strategy that involves both customers and suppliers to synchronize all the business activities. At the same time, companies have understood the importance of enforcing achievement of the goals defined by their strategy through metrics driven management. Thus, the new requirement of managers is to ensure that all processes are effective by continuously measuring their performance through Key Performance Indicators (KPIs) and score cards.


Communication and enforcement of the strategy is obtained by sharing goals and measurements at all the company levels, thus promoting the so-called information democracy. Translating the company strategy into a detailed set of indicators that are closer to the operational


Tasks allows employees to better understand the desiderata of managers. As stated before the neologism often used to refer to this  new picture in BI is  exactly BPM.  Describing BPM requires to understand how management is carried out within a process-oriented enterprise where, beside the classical organizational structure, a set of inter-division processes are present.




Business Strategy and Business Performance Management (BPM). helps organizations to optimize business performance by encouraging process effectiveness as well as efficient use of financial, human, and material resources.  BPM includes DW but it also requires a brand new set of solutions that rely on different technologies and deeply  impact on the overall architecture of the BI platform The organizational structure is a  hierarchy of divisions, aimed at defining their duties and responsibilities, and is usually organized on three different  levels. At the  strategic level, the global strategy of the  enterprise is decided.


The tactical level is usually composed by multiple divisions, each controlling a set of  functions; the decisions taken here are related to the corresponding  functions and must comply with the strategy defined at the upper level. Finally, at the operational level, the core activities are carried out; the  decision power is limited to optimizing the specific production activities in accordance with the main strategy.  On the other hand, a  process identifies a set of logically  related tasks performed to accomplish a defined goal.


Tata Quality Management Services Business Models


Business Processes are orthogonal to organizational structure, in fact  they usually include tasks carried out by different divisions  and require decisions at different levels.  The key point of processes is that the focus is on the global business goals rather than on the single tasks. Of  course, employees involved in processes must share the business strategy in order to synchronize their behavior.  This result can be achieved by translating the top-level strategy into multiple goals at the lower levels, each defined by a target value for a given indicator; each  indicator measures a specific task and should be easily  understood by the employer who is  in charge. This approach, depicted in Fig. 1, is based on a closed-loop where:


1. The strategy and the corresponding targets on indicators are influenced by the enterprise performance as inferred from the information system;

2. The actions/decisions taken at the tactical and operational levels are aimed at matching current and target values for indicators;

3. The actions/decisions fulfill the company strategy and  determine its performance. The closed-loop in the BPM approach Note that, while a business strategy is with no doubt more than a simple set of target values.


The attempts made until now to share strategy policies and directives among other  levels failed owing to how every single employee perceives  the company. At least KPIs allow managers to get results without Misunderstandings and personal definitions, while  it resulted that implementing behavioral business rules or application code limits the autonomy of the employees with  potential loss of flexibility.




Each separates ‘businesses should have its own business strategy so that a multiple business enterprise will have a number of separate business strategies. This raises the practical question of how to define the scope for each such business. Mathur and Kenyon (1997) have examined this question rigorously. They suggest that there should be a separate competitive strategy for each ‘offering’ defined as the unit of customer choice.


The unit of customer choice depends on what the customer is comparing when he or she makes the buying decision. Their many examples of offerings suggest, for instance, that a 100g jar of Nescafé might be a separate offering from a 200g jar of Nescafé if the closest substitute for the customer is the same size jar of another make of instant coffee. They see the two different sizes of jar as being different offerings and therefore requiring different business strategies. This is certainly theoretically elegant but may present a few problems in practice. To divide businesses so finely is likely to be too much work and it is unlikely that it would be possible ever to implement such fine-grained strategies. There is often a conflict between theoretical rigour and practical constraints.


In practice, the problem is more often the reverse of the Nescafé example in that a business is defined too broadly and, consequently, a single strategy is expected to apply to all its facets. One reason for this is that a division or region considers a ‘business strategy’ for its business that includes several distinct offerings. If the genuinely different needs of the different offerings are not separated, the resulting strategies can only be muddled and less useful than they might have been. There is a need for a balance in choosing the scope for each ‘business’. If the scope of the business is defined at too low a level, the work becomes too much. If the level is too high, the analysis loses its rigour. In Practice, the problem is usually that this question of scope is never clearly posed, not that it would be difficult to provide a workable answer.




a) Meeting the real needs of customers


The needs of customers are one major driver of business strategy. It is essential to understand the needs and to identify how to satisfy these needs more fully, more exactly, or more portably than competitors. Business strategy is therefore about beating competitors in meeting customer needs; beating competitors for other purposes may be fun but it is a distraction. It follows from this that a deep analysis and understanding of customers’ Needs inessential to produce a good business strategy. It is necessary to understand the nature and scope of customers’ needs, how these needs differ between different groups or Individuals, and how these needs are changing. It is normally the responsibility of the marketing function to understand these needs. Business strategy is therefore market driven and likely to have very heavy involvement of marketing people. This does not, however, mean that a business strategy is the same thing as a marketing strategy.Business strategy is also heavily influenced by strategic intent, by financial and human constraints, and in fact by everything that makes the chief executive’s job different from the marketing director’s.


In the BMW case example, there is no evidence that BMW defined clearly exactly how the BMW/Rover combination was expected to look from the customers’ point of

view or how it would help BMW to meet customers’ needs better. Five years after the

take-over, the BMW’s brand strategy still looked like two separate companies. In1999, Rover launched the Rover 75 that appears to compete almost directly with its executive models. At the same time, BMW was developing the MX5, a four-wheel drive vehicle, in apparent competition with Rover’s Land rover range. BMWmay have had a clear strategy for how the merged entity would meet customer needs but we cannot detect it.


b) Exploiting genuine competence in business strategy


The major driver of business strategy is the competence of the enterprise. We have described various analytical techniques for measuring resources and identifying capabilities.


The ultimate goal is to identify a unique core competence that can provide the basis for differentiating ourselves from our competition. This is not easy to do and probably more business strategies go wrong because they failed to be honest in their assessment of their own capabilities than because they misunderstood customer needs. In the Nolan, Norton case example, the widening impact of information technologies caused the scope of Nolan, Norton’s consulting assignments to broaden and to require larger teams with broader skills in people and change management. This was recognized during the process of formulating strategy and one of the reasons for selling out to Peat, Marwick was to provide this wider skill base.


C) Providing sustainable competitive advantage


The best business strategies are those which use the capabilities of the firm to address customer needs in a way which leads to sustainable competitive advantage. Chapter 8 described how competitive advantage may be assessed, but also suggested that competitive advantage had some of the elusive qualities of the Holy Grail.In practice, business strategies may have to tolerate less lofty achievements thanlong-term sustainable advantage.


The business strategy has to address the issue of competitive advantage realistically

in the context of that business. This may require an admission that former competitive advantages are being eroded so that the strategy is as much defensive asoffensive.As John Kay (1999) has pointed out, businesses, like people, have to go through good times and bad times. It is probably impossible to achieve competitive advantage permanently and the excellent corporation that can achieve a permanent and irreducible lead is a myth. The business strategy must describe what the basis of competition is, how this basisis changing, and how the strategies take advantage of these changes.




The initial task in Business management is typically the compilation and dissemination of a mission statement. This document outlines, in essence, the raison d'etre of an organization. Additionally, it specifies the scope of activities an organization wishes to undertake, coupled with the markets a firm wishes to serve & Performing a situation analysis, self-evaluation and competitor analysis: both internal and external; both micro-environmental and macro-environmental with this assessment, objectives are set. These objectives should be parallel to a time-line; some are in the short-term and others on the long-term. Business Strategy - is concerned more with how a business competes successfully in a particular market. It concerns strategic decisions about choice of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new opportunities etc




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