business policy presentation by hammad _aiou_spring_2010

8/8/2019 Business Policy Presentation by Hammad _AIOU_Spring_2010

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Department of Admin Sciences,Allama Iqbal Open University, Islamabad

www.aiou.edu.pk

STRATEGY FORMULATIONSTRATEGY FORMULATION

Email: [email protected] M. HAMMAD MANZOOR, MBA HRM - III

Cell: 0321 584 2326 Roll No. 508195394, Karachi Campus

Presented By: M.Presented By: M. HammadHammad ManzoorManzoor

MBA HRMMBA HRM IIlIIl

Roll No. 508195394Roll No. 508195394

Supervised By: Prof.Supervised By: Prof. SafdarSafdar Ahmed KhanAhmed Khan

((November, 2010)November, 2010)


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WELCOMEWELCOME

TO THE PARTICIPANTSTO THE PARTICIPANTS


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Agenda Items for PresentationAgenda Items for Presentation

Introduction about Author and Project

Acknowledgement

Abstract Introduction to the Issue

Practical Study Petroleum Exploration Pvt. Limited (PEL)

Data Collection Method / Analysis



ana ys s

Conclusions

Recommendations

Q & A Session


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Introduction about Presenter My Self

Introduction about Project

Strategy Formulation

Introduction about Presenter and ProjectIntroduction about Presenter and Project



osop y o e pro ec s,

How to understand the problem and find out a patent

solution


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www.aiou.edu.pkAcknowledgementAcknowledgement

To Almighty ALLAH

To Honorable Faculty AIOU, Prof. Safdar Ahmed Khan

To Mr. Mansoor , AIOU, Karachi Campus

To Mr. Tariq Ali G.M. Human Resoureces

(Petroleum Exploration Pvt. Limited), Islamabad)

To my Class fellows of MBA III (Waleem, Javed, Sohail &



e ra e c

To my students at Islamabad (Bahria University, Islamabad)

To my family members


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www.aiou.edu.pkAbstractAbstract

Introduction to project

Objective:

1) What is Strategy?

2) What is Formulation?

3) Relationship of Strategy & Formulation3) What are the main implication of Strategy Formulation?

4) How they could be effective in regard of Organizational

Understanding the Problem



Methodology Used Comparison of Different strategies

Merits & Demerits Analysis

Opportunities & Threats

Conclusions

Recommendations


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www.aiou.edu.pkINTRODUCTIONINTRODUCTION

IntroductionIntroduction



StrategyStrategy FormulationFormulationStrategy V/sFormulationRelationship

Strategy V/sFormulationRelationship

OrganizationOrganization


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www.aiou.edu.pkStrategy Formulation as a part of Strategic ManagementStrategy Formulation as a part of Strategic Management

Strategy Formulation as a part of StrategicMana ement

Strategy Formulation as a part of StrategicMana ement

Strategic management is an ongoing process to develop and revise future-oriented strategies

that allow an organization to achieve its objectives, considering its capabilities, constraints, and

the environment in which it operates.



DiagnosisDiagnosis FormulationFormulation ImplementationImplementation


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Establishment

Analysis of

internal

strengths and

weaknesses

Strategic Management ProcessStrategic Management Process



Strategy

implementation

Strategic

control

of mission,

vision, and

goals

Analysis of

externalopportunities

and threats

and strategyformulation


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Step 1: establishment of mission, vision, and goals

mission - basic purpose and values of the organization

defines the scope of operations states the organizations reason to exist

written in terms of the general clients served by the

organization

Strategic Management Process



strategic vision - provides a perspective on where thecompany is headed and what the organization can become

moves beyond the mission statement

strategic goals - evolve from the mission and vision of the

organization need to be communicated to everyone who has contact

with the organization


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www.aiou.edu.pkStrategic Management Process

Step 2: analysis of external opportunities and threats

successful strategic management depends on an accurate and

thorough evaluation of the environment stakeholders - groups and individuals who affect and are

affected by the achievement of the organizations mission,

goals, and strategies



forecasting future trends is critical

must develop a clear sense of market opportunities

identify potential threats as well

difference between an opportunity and threat may depend

on how a company positions itself strategically


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www.aiou.edu.pkStrategic Management Process Environmental Analysis

Industry and

market analysis

Competitor

analysis

Technological

analysis



SocialanalysisHuman resourcesanalysis

AnalysisMacroeconomicanalysis

Political and

regulatory analysis


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Resources & Core Competence

Resources

are rare

Resources



areorganized

Resources

are

inimitable

Resourcesare

valuable

Corecompetencies


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Internal Resources Analysis

Financial

analysis

Internal

Human resource

assessment

Other internal

resource analysis



Marketing auditOperations

analysis

ResourceAnalysis


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Step 3: internal strengths and weaknesses (cont.)

Benchmarking - process of assessing how well one companys

basic functions and skills compare to those of other companies goal is to thoroughly understand the best practices of

other firms

only permits imitating rather than surpassing competitors



Step 4: SWOT analysis and strategy formulation

SWOT analysis - comparison of strengths, weaknesses,

opportunities, and threats

helps summarize the major facts and forecasts derived from

external and internal analyses

used as the basis for identifying primary and secondary

strategic issues confronting the organization


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Level of Strategies

Level of Strategies Strategy Formation



Corporate Strategy

Competitive Strategy

(Business Level

Strategy)

Functional Level

Strategy


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Corporate strategy - identifies the set of businesses, markets,

or industries in which the organization competes and the

distribution of resources among those businesses

concentration strategy - focuses on a single business

competing in a single industry

vertical integration - expands the domain of the



organ za on n o supp y c anne s or o s r u ors

concentric diversification - moving into businesses that are

related to the companys original core business

conglomerate diversification - expands into unrelated

businesses


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CorporateCorporate

ConcentrationConcentration

VerticalIntegration

VerticalIntegration



StrategyStrategy

UnrelatedDiversification

UnrelatedDiversification

Related

Diversification

Related

Diversification


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Allows a firm to master one business

In-depth knowledge

Easier to achieve com etitive advanta e

Allows a firm to master one business

In-depth knowledge

Easier to achieve com etitive advanta e



Organizational resources under less strain

Lack of ambiguity concerning strategic direction

Consensus

Sometimes found more profitable than other strategies(dependent on industry, of course)

Organizational resources under less strain

Lack of ambiguity concerning strategic direction

Consensus

Sometimes found more profitable than other strategies(dependent on industry, of course)


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Risky in unstable environments

Risky in unstable environments



ro uc o so escence an n us ry ma ur y

Cash flow problems

ro uc o so escence an n us ry ma ur y

Cash flow problems


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Raw

Materials

Primary

Manufac-

Final

Product Whole- Retailing

The Vertical Supply ChainThe Vertical Supply Chain



Extraction turing -

turing

Vertical Integration: The extent to which an organization is involved in

multiple stages of the industry supply chain

Vertical Integration: The extent to which an organization is involved in

multiple stages of the industry supply chain


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When it costs less to do so

Stated cost of product or service

Time and resources devoted to contract creation andenforcement (transaction costs)

Transaction costs are high (market failure) when:

Highly uncertain future

One or small number of suppliers

When it costs less to do so

Stated cost of product or service

Time and resources devoted to contract creation andenforcement (transaction costs)

Transaction costs are high (market failure) when:

Highly uncertain future

One or small number of suppliers

When to Vertically IntegrateWhen to Vertically Integrate



Asset specificity

Asset specificity


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Unrelated DiversificationUnrelated Diversification

Antitrust laws and financial theories made it Antitrust laws and financial theories made it



popular

Not a particularly high performing strategy formost firms (with a few notable exceptions)

popular

Not a particularly high performing strategy formost firms (with a few notable exceptions)


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Based on tangible and intangible relatedness

In theory, can lead to synergy (but synergy is oftenillusive)

Based on tangible and intangible relatedness

In theory, can lead to synergy (but synergy is oftenillusive)

Related DiversificationRelated Diversification



en a g er per orm ng s ra egy an unre a e

diversification (lower risk and higher profitability)

Can lead to corporate-level distinctive competencies

en a g er per orm ng s ra egy an unre a e

diversification (lower risk and higher profitability)

Can lead to corporate-level distinctive competencies


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www.aiou.edu.pkMergers and AcquisitionsMergers and Acquisitions

High Premiums

Increased InterestCosts

High Advisory Fees Poison Pills

High Turnover

High Premiums

Increased InterestCosts

High Advisory Fees Poison Pills

High Turnover



Distraction Less Innovation

Lack of Fit

Increased Risk

Distraction Less Innovation

Lack of Fit

Increased Risk


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www.aiou.edu.pkPRACTICAL STUDY PETROLEUM EXPLORATION Pvt. LIMITED (PEL)

PETROLEUM EXPLORATION Pvt. LIMITED (PEL)PETROLEUM EXPLORATION Pvt. LIMITED (PEL)

Incorporated in June 1994 under the Companies Act,Petroleum Exploration (Private) Limited (PEL) is based at Islamabad,Pakistan.

PEL charter fulfills Government of Pakistan strategic policyobjectives of creating indigenous corporate entities in the private sectorfor exploration and production of hydrocarbon deposits.

Under the dynamic leadership of Mr. Zaheeruddin, Chairmanand Chief Executive, PEL has embarked upon a very aggressive exploration

ro ram to ra idl search new de osits of h drocarbons and undertake its



development of new discoveries on fast track basis.

PEL has a highly experienced team of petroleum professionalsincluding geologists, geophysicists, petroleum and process engineers, andfinancial experts. It is adequately equipped with logistics and supportservices. PEL has recently engaged an industry renowned Stanfordalumnus Dr. Gulfaraz Ahmed as the Chief Operating Officer. He iscommitted to developing PEL into a well resourced integrated team of

cutting-edge expertise.

PEL believes in optimally exploiting knowledge/technology byoutsourcing to the leaders in service industry.

PEL has concluded an agreement with D&S InternationalConsulting Limited, Calgary Alberta, Canada, for the provision of technicalservices.


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PETROLEUM EXPLORATION Pvt. LIMITED (PEL)PETROLEUM EXPLORATION Pvt. LIMITED (PEL)




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www.aiou.edu.pkPRACTICAL STUDY PETROLEUM EXPLORATION Pvt. LIMITED (PEL)




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The company is wholly Pakistani owned and has the bright future in the energysector of Pakistan.

Senior and superior professionals have been engaged with for the exploration andproduction of hidden energy natural assets of Oil and Gas.

The company has very aggressive future plans for drilling and production of Oil andGas.

The company is fully equipped with modern day equipment for the facilitation ofemployees to enhance their performance effectively.

Highly Self esteemed professionals, shown in the Organogram, been used forcreating more progressive for running the plant.

Under the proctorship of Mr. Zaheeruddin the company is developing by leaps and

Strengths / Merits



bounds and spreading its business throughout Pakistan and abroad. Have Joint Venture with almost 70% E&P companies operating in Pakistan. Mr. Zaheeruddin was awarded the best business man for the year 2007 by the Prime

Minister of Pakistan. The departments like Exploration, Production and Process are working cordially and

proving to be the back bone of each other. Mr. Zaheeruddin and Co. does have very good relations with Govt. which is very

important especially in the matter of acreage allocation. The company is on the verge of developing several ongoing projects which would

prove a real epic in the disastrous power and energy shortage situation of thecountry.

Equal opportunity Employer.


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PEL holds low strategy management.

Risk taking persons are lying in the low cadre

area, which is leaning behind in their personal

progress. Administrations department does not have

enough strength to cop with day to day affairs.

Weakness / De-Merits



.

It does not have proper opportunities for policymaker professionals.


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Block 22 contains most of the professionalgood policy and thinker

Professionals generally hold less market

strategy Future entrepreneur of in Pakistan energy sector. HR department can be strengthened by hiring

management professionals who can add the value to its

Conclusions



business.

Coporate strategy can be improved by makingthe high management staff more trained and moremotivate

Administration department needs to address for ofhiring experienced professionals of the relevant trade.

The emphasis of the company emphasized is workprogress, nor on the strategic management ofproject, which could be helpful for companyoperation smooth conduction and helping out forbetter prospectivity in the form of his personalgrowth, strategy management and motivation tocompany.

Recommendations


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Thanks for your patience,,,,,,



Q & A Session

business policy presentation by hammad _aiou_spring_2010

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