--By Saurav Raj Verma

 

When the world is talking about strategy and expanding their corporate voyage, are we here just supposed to sit back and relax? Why our corporate houses are not visionary? It does not just apply to the corporate but also to the Government Ministries, their agencies. Why are we not able to join even the Fortune list of 1000 companies (forget top 500). Now, we can just keep pointing out to the government, their policy, instability, which we know is not going to help us. So let us forget the government. But what are we doing on the strategic point of view? Yahoo's acquisition of Tumbler, Microsoft's acquisition of Nokia Mobile, Lenovo's acquisition of Motorola, Microsoft's acquisition of Skype, Facebook's acquisition of Watsapp, ongoing process of Itochu Corporation’s acquisition of Redington, Google initiative of 'India Get Your Business Online', Spice jet’s 1 re base fare, etc. are some of the examples of strategic moves made by the big business players to gain competitive advantage.     

 

Believe it or not, but Nepal is the next generation player. We will be in the position where India is now, however that would take 10-15 years of time. Recently Tata Consultancy Services (TCS) became the world’s no. 10 player in the IT, joining the party with IBM, Accenture and other giants. Flipkart; India’s largest e-retailer has become a big threat to international giants Amazon and EBay. Till date it has generated billions of dollars from the venture capitalists. (Don’t forget, Venture capitalists do not just pour out the money, unless they see really high ROI). Right now they are the first E-commerce to provide next day delivery to all the metros, which is the first of its kind. Also, they have made it compulsory to all of their chief executives, to handle customer calls at least once a month, an initiative to make everyone accountable. These kind of strategic move which they are practicing, would not only improve the service but would also add up in Brand Equity and Image, a very good example of strategic management. I am not interested to take up the example of western companies, when we got prime examples right in front of us. 

 

 It was recently in the news; a Nepali national in India’s Silicon Valley, Bangalore, started a company related to social media analytics, which is now in the eyes of Facebook for acquisition. It did not come out of the blue. Some come in media, some do not. But does not it show our calibre? Well, it does for most of us. On the other hand, BPO is slowly taking it pace in Nepal. Philippines and India are the leaders in Asia when it comes to call centre with inexpensive manpower. India’s Noida-National Capital Region (NCR) is filled with call centres and Gurgaon-NCR is filled with most of the MNCs' India office. Nepal is slowly coming to that level; for example, Ncell has outsource its Call Centre, which is a good sign, where MNCs' are showing trust on the smaller player and their capabilities.  

 

Having said this, where is the strategic management or say strategic planning to enlarge and join the pool of international player? We can and we should. But before that, do we really know what is the difference between management and strategic management? Be assured, it is not Quantum Mechanics, nor the God’s particle or the dark matter or even the calculation of the orbital mechanics of the satellites or the compressive and expansive waves generation when an aircraft flies supersonic or the hypersonic velocity of spacecraft. 

 

 Strategic management simply is the planning and its execution process which would yield to the organization substantial growth, to attain that competitive advantage. An organization goal could be short term, temporary or long term and permanent. The strategy could be from merger and acquisition (M&A), spin off, split off, liquidation, off shore extension to new market development, new product development, diversification, re-branding, customer relation management (CRM) etc. It basically depends on the organisation's mission and vision. That is why, when one is taught strategic management in any B-school, the first thing that the student goes through is the difference between the mission and the vision. In simple terms, mission is short term whereas vision is long term. Students are then taught about different aspect of strategic management, the corporate strategy and its verticals; the way it is relayed to the lower level of management. Again, a tactic is short term planning and execution whereas the strategy is long term planning with its execution process.  

 

Let us not go deep in the strategic management class, SM-101. However, I would like to highlight some of the major tools that are generally used in SM. Ansoff matrix, SWOT analysis (Strength, Weakness, Opportunity and Threat), TOWS (opposite of SWOT), Porter five forces analysis, ETOP (Environment Threat Opportunity Profile), BCG matrix (Boston Consulting Group Matrix). These are some of the basic tools that are used while formulating strategy aligned to the vision and mission of the company. In more laymen term, SM comprises of ADE model viz. Analysis, 

Decision, Execution.  

 

A research paper published by Emerald Group Publishing Limited, 2013, titled, 'Insights on strategic management practices in Nepal,' authored by Binod Krishna Shrestha, (Kathmandu University), Devi R. Gnyawali, (Virginia Tech), it quotes  “Managers in Nepal have developed some shared understanding of key aspects of strategic management and practice some important aspects of strategic management, much remains to be done in-order for them to develop a clear strategic focus so that they could develop their abilities to compete with global players and to create competitive advantages.” The methodology to prepare the research paper was based on multiple data collection such as interviews and review of reports and the cases were analyzed to identify several themes for discussion of similarities and differences in the views and practices of strategic management.    

 

It is at least good to know that, there are such researches carried out to actually understand the scenario of the Strategic Management in the country. Unlike the West, Asia and particularly South Asia is still unenlightened by the warmth of Strategic Management. Management practices in this region are often characterized as ad hoc and reactive, personalized, idiosyncratic leadership and paternalistic. Most of the managers in Nepal are focused on revenue generation, rather than thinking out of the box to have competitive advantage, by doing something unique. It is obvious to have competition; one cannot be the Cash Cow or the Star all the time (Cash cow, star; parameter of BCG matrix). But having a Unique Selling Proposition (USP) and long term strategy would help the company, big time.     

 

Strategic management comprises of the sound understanding of macro and micro environment, proper resource allocation and setting priorities. It could be the mixture of intended strategy or the emergent strategy. One can plan and pursue, intended strategy accordingly but some time, the requirement would be otherwise. A change in strategy would be required at the very moment the emergent strategy or say any damage control procedure or even the backup plan to counteract. The firm should never forget its capability and strengths. SWOT analysis is what we popularly call it. Unless the firm knows its own Strength (S), its own Weaknesses (W), the market and industry Opportunities (O), its competitors and the environment Threats (T), it is in no position to even think about formulating any strategy. Sometime, the industry would be doing really good but same may not apply to particular market segment or the geographical targets.  

 

The strategy starts with the ETOP (Environment Threat Opportunity Profile) model, where the internal and external environments are analyzed (called profiling).  It is important for any business to understand its internal environment and external environment. The internal environment could be manpower, departments, resources, internal policies, attritions etc. whereas the external could be socio-economic, political, geographical, competitors, other tangible or intangible barriers etc., which are not in the control of the company, but may affect or have been affecting it directly or indirectly. Unless the organization is in a situation to properly analyze and understand all the environmental factors, it would be difficult to form a strategy for a super-ordinate goal, to achieve that competitive advantage. Meanwhile, there are different ways of approaching, for example SOSTAAC - an approach where first the Situation is understood, Objectives are set, Strategies are formulated, Tactics are implemented, Action is actually done, Results are Analyzed and Control measures are deployed.  

 

Moreover, just forming a strategy does not make it great. What matters the most is the effective execution, which could actually yield and meet the objectives.  It is not always required to come up with new idea all the time, but the same prevailing idea could be done in much better way. The business environment is dynamic, keeps changing. It is also very important to keep a close eye on the competitors to keep up the pace and strategizing accordingly.  Effective manager is the one, who knows SWOT of the company, the team, ETOP, has that passion and the vision to look out of the box. And then channelizing the very planned thought process could mould up to strategy and the approach becomes tactics to move ahead.   

 

Lastly, as mentioned earlier, it is no way a study of orbital mechanics, rather just understanding the vision and the mission of the organization and to efficiently drive through the highway, which is no way smooth. But understanding it, the analytics, the super ordinate goal and the passion to make things happen are the prime requirement that actually make a difference.  Needless to say, the biggest risk is not taking any risk.

 

(Verma is Brand Strategist at Advantage Group (P) Ltd. He can be reached at saurav@advantage.com.np)