WORLD COLLEGE OF TECHNOLOGY AND

MANAGEMENT (WCTM),
GURUGRAM
Name of the Faculty Ms. Madhvi Batra

Department Department of Business Administration

Subject Financial Management

Course Master of Business Administration (MBA)

Semester 4th Semester

Session January 2024-May 2024

Lesson Plan 2023-24
Contents:

1. Lesson Plan
2. Syllabus
3. Notes
4. Past question papers

Lesson Plan
Faculty Name: Ms. Madhvi Batra
Course: MBA
4th Semester

Course Title: Economics for Business Strategy

Economics for business Strategy
Course Code: 20IMG24GB1

UNIT-I
Theory of the Firm: Its rationale, Objectives, Boundary, Change in
boundary (Mergers and acquisitions), Resource Based view of Firm,
Firm as the source of Profit, Vertical Integration and Conglomerate
diversification, Internationalization.

UNIT-II

Architecture: Internal and external architecture, designing and

management of architecture, Evaluation of performance, corporate
Governance, Reputation, Knowledge, Rent Generation and
Management.

UNIT-III

Competitive Sustainability: Origin of Competitive Advantage, Creative

Destruction, Innovation, Growth, Changing Product Portfolio,
entrepreneurship etc.

UNIT-IV

Public Policy: Regulation and Privatization, Competition law,

Competition Commission of India. Recommended Readings:
1. Andreu Mas- Colell, Michael D. Whinston & Jerry R. Green,
2.Microeconomic Theory, Oxford University Press. 3.Trimorthy C. G.
Fisher& Robert G. Waschik, Managerial Economics: A Game Theoretic
Approach, Routeledge.
4. Paul Milgram & John Roberts, Economics, Organization &
Management, Prentice Hall.
5. D.N. Sengupta & Anandya Sen., Economics of Business Policy,
Oxford University Press. Steven E Landsberg, Price Theory &
Application, Dryden.
6. Walter Nicholson, Microeconomic Theory, Thomson.
Strategic management refers to the managerial process which forms a strategic vision, mission, set objectives, craft and execute the strategy
and then take any corrective adjustments to the process. Without a vision, companies are prone to drift aimlessly and lose any claim to
being an industry leader. The faster a company's business environment is changing, the more critical it becomes for its managers to be
good entrepreneurs in making both predictions and timely strategic adjustments.

The theory of the firm consists of a number of economic theories that explain and predict the nature of the firm, company, or
corporation, including its existence, behaviour, structure, and relationship to the market.
Firms are key drivers in economics, providing goods and services in return for monetary payments and rewards. Organisational structure,
incentives, employee productivity, and information all influence the successful operation of a firm in the economy and within itself.As
such major economic theories such as transaction cost theory, managerial economics and behavioural theory of the firm will allow for an
in-depth analysis on various firm and management types.

In simplified terms, the theory of the firm aims to answer these questions:

1. Existence. Why do firms emerge? Why are not all transactions in the economy mediated over the market?
2. Boundaries. Why is the boundary between firms and the market located exactly there in relation to size and output variety?
Which transactions are performed internally and which are negotiated on the market?
3. Organization. Why are firms structured in such a specific way, for example as to hierarchy or decentralization? What is the
interplay of formal and informal relationships?
4. Heterogeneity of firm actions/performances. What drives different actions and performances of firms?
5. Evidence. What tests are there for the respective theories of the firm?

Firms exist as an alternative system to the market-price mechanism when it is more efficient to produce in a non-market environment. For
example, in a labor market, it might be very difficult or costly for firms or organizations to engage in production when they have to hire
and fire their workers depending on demand/supply conditions. It might also be costly for employees to shift companies every day
looking for better alternatives. Similarly, it may be costly for companies to find new suppliers daily. Thus, firms engage in a long-term
contract with their employees or a long-term contract with suppliers to minimize the cost or maximize the value of property

boundary is drawn in terms of the price mechanism. Outside the firm the price mechanism operates in all transactions and when the firm
deals with the outside world it is ruled by the price mechanism. In contrast, within the firm operations are controlled by the direction of
the entrepreneur.

the theory of the firm Ronald Coase?

His answer was that firms are a response to the high cost of using markets. It is often cheaper to direct tasks by fiat than to negotiate and
enforce separate contracts for every transaction. Such “exchange costs” are low in markets for standardised goods, wrote Coase.

theory of the firm in economics?

The Theory of the Firmshows that firms exist only when they improve the efficiency of economic transactions. The efficiency of firms is
compared to the alternative of direct exchange between consumers. Direct exchange between consumers involves search, bargaining,
barter, and contracts.

the theory of the firm relevant to strategic?

Because the firm is the critical unit of analysis in strategy, we need to define what firms are, how they create value, and what their
organizational boundaries are in order to understand their overall performance. However, this must be done in a manner that is most
useful for strategic analysis and decision making.

the 4 theories of the firm?

These theories are: The Neoclassical Theory, The Transactions Cost Theory, The Principal-Agent Theory, and The Evolutionary Theory.
The Neoclassical Theory of the Firm, in its basic form, views the firm as a black box rational entity.

the neoclassical theory of firm in economics?

In the neoclassical theory of the firm, the firm sets price and quantity in order to maximize profit subject to the constraint of market
demand. Every phrase in the paradigm has been questioned in the course of this chapter.

transaction cost theory of the firm?

The transaction-cost theory of firm boundaries is based on the premise that firms will internalize particular transactions whenever the
transaction costs associated with performing these transactions through the market mechanism are greater than within the firm.

Coase Theorem Meaning

The meaning behind the Coase theorem is heavily related to externalities. Proposed by the Nobel Prize laureate Ronald Coase, the

theorem argues that if the government doesn’t intervene in the case of externalities, the problem can still be solved between the parties.

According to Ronald Coase, these solutions may be extremely effective.

On the other hand, externalities can be positive. For example, if someone stops smoking, this decision will also affect the people around

them. They will no longer smell cigarettes or continuously be passive smokers. This is a positive externality.

What Is Diversification Strategy? (With Types and Examples

A diversification strategy is a practice that companies use to help expand their business. By branching out into new product offerings or

markets, companies can promote financial security, industry growth and the acquisition of a larger target audience. Learning more about

strategy diversification and its main types can help you develop the skills to help a company grow.In this article, we define diversification

strategies and their main types, provide a list of examples, offer some key benefits and include tips to help you implement these strategies

at work.

What is a diversification strategy?

A diversification strategy is a technique you can use to expand a business. This strategy helps encourage company growth by adding new

products and services to the company's offerings. With these new offerings, the company can pursue business opportunities outside of its

regular practices and markets. Businesses often use a diversification strategy to establish themselves in new markets or to target a new

demographic.

What Is Diversification Strategy? (With Types and Examples

A diversification strategy is a practice that companies use to help expand their business. By branching out into new product offerings or

markets, companies can promote financial security, industry growth and the acquisition of a larger target audience. Learning more about

strategy diversification and its main types can help you develop the skills to help a company grow.In this article, we define diversification

strategies and their main types, provide a list of examples, offer some key benefits and include tips to help you implement these strategies

at work.

What is a diversification strategy?

A diversification strategy is a technique you can use to expand a business. This strategy helps encourage company growth by adding new

products and services to the company's offerings. With these new offerings, the company can pursue business opportunities outside of its

regular practices and markets. Businesses often use a diversification strategy to establish themselves in new markets or to target a new

demographic.What are the types of diversification strategies?

Here are the four types of diversification strategies that a company may use based on its goals and resources:

Horizontal diversification
Horizontal diversification refers to the diversification practice a company uses when expanding existing products or services. A company

may add new products that resemble or relate to current products while also adding expanded options for the customer. This can often

mean simply adding more options and variety to an established product.

Vertical diversification
Vertical diversification, or vertical integration, refers to the diversification process that allows a company to expand into other areas of its

manufacturing process. For example, a manufacturing company may expand to create one of the key parts or materials for its finished

products. Like horizontal diversification, this practice allows a business to stay in the same market in which it has already established

itself.

What Is Diversification Strategy? (With Types and Examples)

A diversification strategy is a practice that companies use to help expand their business. By branching out into new product offerings or

markets, companies can promote financial security, industry growth and the acquisition of a larger target audience. Learning more about

strategy diversification and its main types can help you develop the skills to help a company grow.In this article, we define diversification

strategies and their main types, provide a list of examples, offer some key benefits and include tips to help you implement these strategies

at work.

What is a diversification strategy?

A diversification strategy is a technique you can use to expand a business. This strategy helps encourage company growth by adding new

products and services to the company's offerings. With these new offerings, the company can pursue business opportunities outside of its

regular practices and markets. Businesses often use a diversification strategy to establish themselves in new markets or to target a new

demographic

What are the types of diversification strategies?

Here are the four types of diversification strategies that a company may use based on its goals and resources:

Horizontal diversification
Horizontal diversification refers to the diversification practice a company uses when expanding existing products or services. A company

may add new products that resemble or relate to current products while also adding expanded options for the customer. This can often

mean simply adding more options and variety to an established product.

Vertical diversification

Vertical diversification, or vertical integration, refers to the diversification process that allows a company to expand into other areas of its

manufacturing process. For example, a manufacturing company may expand to create one of the key parts or materials for its finished

products. Like horizontal diversification, this practice allows a business to stay in the same market in which it has already established

itself.

Conglomerate diversification
Conglomerate diversification allows a company to launch a service or product that's completely new to the company and has no relation

to its current market. A company may often do this by acquiring a company in an unrelated market. This strategy can allow companies to

expand across industries and appeal to a new consumer demographic.

Concentric diversification
Concentric diversification strategies utilize a company's existing resources to make a new, improved or updated product that relates to

current products. This is often a cost-effective way to expand a business. It can help a company reach new customers while appealing to

pre-established ones.

Strategy diversification examples

Here are some examples of the different types of diversification strategies:

Horizontal
A pottery shop could use horizontal diversification if it wants to offer more color options for its items. The shop's customers may be

more likely to purchase two cups if they can choose from different colors. This can attract similar customer bases while also promoting

repeat visits and larger purchases of the same item.

Vertical
A car company could use vertical diversification to personally create more aspects of its manufacturing process. It might decide to

manufacture a material that goes into each vehicle rather than purchasing it. This can help the company expand its reach while gaining

more control of its own manufacturing strategy.

Conglomerate
An example of this strategy in practice would be if an established film company started selling home decor products in addition to their

films. In this scenario, they may sell home decor with their logo on it or in signature colors. They may decide to do this by purchasing a

home decor company. This can appeal to their existing customers, who are fans of the films, and new customers who enjoy the aesthetic

of the new products.

Concentric
If a print shop that already sells T-shirts with custom images printed on them wants to expand its product line, it may decide to use a

concentric diversification method. This way the shop could add custom-printed tote bags or sweatshirts to its product line using its
printing machine. In this scenario, the only new material the shop may invest in would be the tote bags or sweatshirts because it would

already have the other supplies necessary for the business venture.

What are the benefits of using a diversification strategy?

Diversification strategies can help a company in a variety of ways, including:

Expands the target audience

Launching new products or services can help a company appeal to a new demographic of consumers. For example, if a hair salon that

usually only cuts men's hair starts to serve all potential customers as well, it can greatly increase its revenue. By expanding existing services

or products with new or updated options, companies can appeal to both new and current customers.

Minimizes risk

Expanding a business can help ensure the company has more than one means of earning revenue. This can help minimize financial risk if

the core market a company caters to slows down or becomes irrelevant. For example, if a clothing company only sells clothes for cold

weather and winter, it may not make as much money in the summer months. Using a diversification strategy to expand the type of

clothing the company sells can ensure that it earns a profit throughout the seasons.

Maximizes profit
Diversification strategies can also help maximize a company's chance for profit. When a company sells more products and services, it often

can have a higher earning potential than one that focuses on a single product or service. For example, an auto repair shop that only fixes

tire-related issues may not have the potential to earn as much profit as a repair shop that can troubleshoot any issue with a vehicle.

Offers opportunity for growth

Diversification strategies can give companies an opportunity for growth. In ambitious uses of diversification marketing, a company can

even expand to reach other industries. This allows companies to adjust their goals and focuses to evolve as their consumers and their

employees do the same.

What Is Corporate Governance?

Corporate governance is the system of rules, practices, and processes by which a company is directed and controlled. Corporate

governance essentially involves balancing the interests of a company's many stakeholders, which can include shareholders, senior

management, customers, suppliers, lenders, the government, and the community. As such, corporate governance encompasses practically

every sphere of management, from action plans and internal controls to performance measurement and corporate disclosure.

KEY TAKEAWAYS
● Corporate governance is the structure of rules, practices, and processes used to direct and manage a company.

● A company's board of directors is the primary force influencing corporate governance.

● Bad corporate governance can destroy a company's operations and ultimate profitability.

● The basic principles of corporate governance are accountability, transparency, fairness, responsibility, and risk management.

Understanding Corporate Governance

Governance refers to the set of rules, controls, policies, and resolutions put in place to direct corporate behavior. A board of directors is

pivotal in governance, while proxy advisors and shareholders are important stakeholders who can affect governance.
Communicating a company's corporate governance is a key component of community and investor relations. For instance, Apple Inc.'s

investor relations site profiles its corporate leadership (the executive team and board of directors) and provides information on its

committee charters and governance documents, such as bylaws, stock ownership guidelines, and articles of incorporation.1

Most successful companies strive to have exemplary corporate governance. For many shareholders, it is not enough for a company to be

profitable; it also must demonstrate good corporate citizenship through environmental awareness, ethical behavior, and other sound

corporate governance practices.

Benefits of Corporate Governance

● Good corporate governance creates transparent rules and controls, guides leadership, and aligns the interests of shareholders,

directors, management, and employees.

● It helps build trust with investors, the community, and public officials.

● Corporate governance can give investors and stakeholders a clear idea of a company's direction and business integrity.

● It promotes long-term financial viability, opportunity, and returns.

● It can facilitate the raising of capital.

● Good corporate governance can translate to rising share prices.

● It can reduce the potential for financial loss, waste, risks, and corruption.

● It is a game plan for resilience and long-term success.

Corporate Governance and the Board of Directors

The board of directors is the primary direct stakeholder influencing corporate governance. Directors are elected by shareholders or

appointed by other board members and charged with representing the interests of the company's shareholders.

The board is tasked with making important decisions, such as corporate officer appointments, executive compensation, and dividend

policy. In some instances, board obligations stretch beyond financial optimization, as when shareholder resolutions call for certain social

or environmental concerns to be prioritized.

Boards are often made up of a mix of insiders and independent members. Insiders are generally major shareholders, founders, and

executives. Independent directors do not share the ties that insiders have. They are typically chosen for their experience managing or

directing other large companies. Independents are considered helpful for governance because they dilute the concentration of power and

help align shareholder interests with those of the insiders.

The board of directors must ensure that the company's corporate governance policies incorporate corporate strategy, risk management,

accountability, transparency, and ethical business practices.

A board of directors should consist of a diverse group of individuals, including those with matching business knowledge and skills, and

others who can bring a fresh perspective from outside the company and industry.

The Principles of Corporate Governance

While there can be as many principles as a company believes make sense, some of the most common ones are:

● Fairness: The board of directors must treat shareholders, employees, vendors, and communities fairly and with equal

consideration.
● Transparency: The board should provide timely, accurate, and clear information about such things as financial performance,

conflicts of interest, and risks to shareholders and other stakeholders.

● Risk Management: The board and management must determine risks of all kinds and how best to control them. They must

act on those recommendations to manage risks and inform all relevant parties about the existence and status of risks.

● Responsibility: The board is responsible for the oversight of corporate matters and management activities. It must be aware

of and support the successful, ongoing performance of the company. Part of its responsibility is to recruit and hire a chief

executive officer (CEO). It must act in the best interests of a company and its investors.

● Accountability: The board must explain the purpose of a company's activities and the results of its conduct. It and company

leadership are accountable for the assessment of a company's capacity, potential, and performance. It must communicate issues

of importance to shareholders.

Corporate Governance Models

Different corporate governance models may be found throughout the world. Here are a few of them.

The Anglo-American Model

This model can take various forms, such as the Shareholder, Stewardship, and Political Models. The Shareholder Model is the principal

model at present.

The Shareholder Model is designed so that the board of directors and shareholders are in control. Stakeholders such as vendors and

employees, though acknowledged, lack control.

Management is tasked with running the company in a way that maximizes shareholder interest. Importantly, proper incentives should be

made available to align management behavior with the goals of shareholders/owners.

The model accounts for the fact that shareholders provide the company with funds and may withdraw that support if dissatisfied. This is

supposed to keep management working effectively.

The board will usually consist of both insiders and independent members. Although traditionally, the board chairperson and the CEO

can be the same, this model seeks to have two different people hold those roles.

The success of this corporate governance model depends on ongoing communications among the board, company management, and the

shareholders. Important issues are brought to shareholders' attention. Important decisions that need to be made are put to shareholders

for a vote.

U.S. regulatory authorities tend to support shareholders over boards and executive management.

The Continental Model

Two groups represent the controlling authority under the Continental Model. They are the supervisory board and the management

board.
In this two-tiered system, the management board is composed of company insiders, such as its executives. The supervisory board is made

up of outsiders, such as shareholders and union representatives. Banks with stakes in a company also could have representatives on the

supervisory board.

The two boards remain entirely separate. The size of the supervisory board is determined by a country's laws and can't be changed by

shareholders.

National interests have a strong influence on corporations with this model of corporate governance. Companies can be expected to align

with government objectives.

This model also greatly values the engagement of stakeholders, as they can support and strengthen a company's continued operations.

The Japanese Model

The key players in the Japanese Model of corporate governance are banks, affiliated entities, major shareholders called Keiretsu (who may

be invested in common companies or have trading relationships), management, and the government. Smaller, independent, individual

shareholders have no role or voice. Together, these key players establish and control corporate governance.

The board of directors is usually made up of insiders, including company executives. Keiretsu may remove directors from the board if

profits wane.

The government affects the activities of corporate management via its regulations and policies.

In this model, corporate transparency is less likely because of the concentration of power and the focus on the interests of those with that

power.

How to Assess Corporate Governance

As an investor, you want to select companies that practice good corporate governance in the hope that you can thereby avoid losses and

other negative consequences such as bankruptcy.

You can research certain areas of a company to determine whether or not it's practicing good corporate governance. These areas include:

● Disclosure practices

● Executive compensation structure (whether it's tied only to performance or also to other metrics)

● Risk management (the checks and balances on decision-making)

● Policies and procedures for reconciling conflicts of interest (how the company approaches business decisions that might

conflict with its mission statement)

● The members of the board of directors (their stake in profits or conflicting interests)

● Contractual and social obligations (how a company approaches issues such as climate change)

● Relationships with vendors

● Complaints received from shareholders and how they were addressed

● Audits (the frequency of internal and external audits and how any issues that those audits raised have been handled)

Types of bad governance practices include:

● Companies that do not cooperate sufficiently with auditors or do not select auditors with the appropriate scale, resulting in the

publication of spurious or noncompliant financial documents

● Executive compensation packages that fail to create an optimal incentive for corporate officers

● Poorly structured boards that make it too difficult for shareholders to oust ineffective incumbents.

One company that seems to have consistently practiced good corporate governance, and adapts or updates it often, is PepsiCo. In drafting

its 2020 proxy statement, PepsiCo sought input from investors in six areas:

● Board composition, diversity, and refreshment, plus leadership structure

● Long-term strategy, corporate purpose, and sustainability issues

● Good governance practices and ethical corporate culture

● Human capital management

● Compensation discussion and analysis

● Shareholder and stakeholder engagement.

The company included in its proxy statement a graphic of its current leadership structure. It showed a combined chair and CEO along

with an independent presiding director and a link between the company's "Winning With Purpose" vision and changes to the executive

compensation program.

What Are the 4 Ps of Corporate Governance?

The four P's of corporate governance are people, process, performance, and purpose.

Why Is Corporate Governance Important?

Corporate governance is important because it creates a system of rules and practices that determines how a company operates and how it

aligns with the interest of all its stakeholders. Good corporate governance fosters ethical business practices, which lead to financial

viability. In turn, that can attract investors.

What Are the Basic Principles of Corporate Governance?

The basic principles of corporate governance are accountability, transparency, fairness, responsibility, and risk management.

The Bottom Line

Corporate governance consists of the guiding principles that a company puts in place to direct all of its operations, from compensation,

risk management, and employee treatment to reporting unfair practices, dealing with the impact on the climate, and more.

Corporate governance that calls for upstanding, transparent behavior can lead a company to make ethical decisions that will benefit all of

its stakeholders, including investors. Bad corporate governance can lead to the breakdown of a company, often resulting in scandal and

bankruptcy.

What is business architecture?

Business architecture is a discipline that represents and designs the holistic organizational structure, business processes,

information flows, and technological infrastructure.

It serves as a strategic framework, bridging the gap between an organization's vision and its tangible operations. It aligns all parts

of the organization with its goals and objectives by providing a clear map.

Business architecture is like the picture on the puzzle box. It gives you a clear view of the complete image, showing how each
piece fits together to form the whole.

What is business architecture in simple terms?

Imagine a complex puzzle. Each piece of the puzzle represents a different part of a business. These parts include its products, customer

interactions, and internal processes.

Business architecture is like the picture on the puzzle box. It gives you a clear view of the complete image, showing how each piece fits

together to form the whole.

In essence, it's the blueprint that helps businesses understand and organize their operations more effectively.

Comparison to other architecture types

Business architecture is one of the pillars of the broader discipline of enterprise architecture.
Different

architecture types (Source: itarch.com)

● Business architecture vs. enterprise architecture: While both are concerned with alignment and coherence, business

architecture focuses in on the business strategy and its translation into operational reality. Enterprise architecture, on the other

hand, covers the entire spectrum, including IT architecture, and technology architecture.

● Business architecture vs. solution architecture: Solution architecture is more IT-centric, focusing on designing solutions

to specific business problems, often involving the integration of technology. Business architecture, meanwhile, provides the

broader context within which these solutions are designed.

● Business architecture vs. IT architecture: Business architecture and IT architecture are intertwined disciplines steering an

organization towards its goals. Business architecture visualizes relationships between business entities and processes.

Conversely, IT architecture centers on the technological infrastructure, ensuring a secure and efficient environment that

supports business goals.

● Business architecture and business analysis: Business analysis is about identifying business needs and finding technical

solutions to business problems. Business architecture provides the strategic context for these analyses, ensuring that solutions

align with the company's broader objective

Key components of business architecture

Business architecture provides a comprehensive framework that captures the essence of an organization. IT architects document core

elements to understand how a business operates and creates value.

Here are the primary ones:

1. Capabilities - Business capabilities define the inherent abilities of an organization, representing what the business can do.

They are high-level, stable over time, and independent of organizational structure. For example, "Customer Relationship

Management" or "Supply Chain Optimization" might be identified capabilities within a business.

2. Value streams - Value streams map out the sequence of activities required to deliver a product or service to a customer. They

illustrate how value flows through the business's capabilities, providing a clear picture of end-to-end business processes.

3. Information architecture - This component captures the key information entities or data objects that are crucial for the

business. It establishes rules for organizing and using data in a way that enables smooth information flow and effective usage.

4. Organizational structure - This element delves into the formal hierarchy of the organization, detailing departments, teams,

roles, and responsibilities. It ensures that the organizational setup supports the strategic objectives and that there's clear

alignment across units.

5. Stakeholders and relationships - Identifying key stakeholders, both internal and external, is crucial. This component maps

out the relationships between different stakeholders, understanding their needs, influence, and impact on the business

architecture.

6. Strategy and goals - This part captures the organization's goals and connects them with other parts of the business structure.

It makes sure that the business is prepared to achieve its long-term vision and mission.

7. Policies and standards - Policies and standards define the rules and guidelines that govern various aspects of the organization.

They ensure consistency, compliance, and alignment with best practices and regulatory requirements.

Use cases

Business architecture with its holistic approach to understanding and structuring an organization, finds application in a myriad of

scenarios.
These examples show how it helps with agreement, making change easier, and keeping the organization adaptable to market changes.

1. Strategic alignment and decision-making

● Business strategy: It shows what the organization is good at, and helps leaders find weaknesses and areas to improve.

● Mergers and acquisitions: Business architecture helps understand and integrate companies that merge or acquire others,

ensuring smooth process alignment.

2. Business transformation and digital initiatives

● Digital transformation: It guides businesses in aligning digital initiatives with goals and capabilities during their digital

journeys.

● Operational efficiency: By mapping out processes and value streams, organizations can identify bottlenecks, redundancies,

and areas for optimization.

3. Change management and organizational redesign

● Organizational restructuring: It ensures that structural changes in businesses align with strategic objectives.

● Change initiatives: It provides the necessary structure for any significant transformation effort. Whether it's introducing a

product or penetrating a market, it ensures the change aligns with the company's abilities.

4. Risk management and compliance

● Regulatory compliance: It helps organizations understand and map out processes for following rules and laws in their

industry.

● Risk assessment: It helps identify risks and create strategies to reduce them by giving a clear view of the organization's

operations.

5. Innovation and product development

● Product launch: It ensures that the organization is prepared to support the launch of a new product or service.

● Innovation strategy: For organizations looking to innovate, Business Architecture provides insights into areas of strength

and potential, guiding innovation efforts.

Business architecture is an important aspect in all these use cases within an organization. It helps the organization stay ready and handle

the difficulties and challenges of the modern business world.

Business architecture frameworks and methodologies

In business architecture, frameworks and methods help map and align a company's strategies, processes, and structures.

These frameworks offer structured approaches to design, analyze, and implement business architecture within an

organization.

Let's delve into an overview of popular frameworks and how to choose the right one for your organization.

● Overview: A comprehensive framework that provides a detailed approach to designing, planning, implementing, and

governing an enterprise business architecture.

● Benefits: Offers a holistic approach, encompassing different aspects of an organization, including business, data, application,

and technology architectures.

● Suited for: Large organizations looking for a detailed and structured approach to business architecture.

Zachman framework

● Overview: A schema is a structured way to view and define a company. It provides a logical structure for organizing and

classifying descriptions of an organization.

● Benefits: Provides a disciplined and structured approach to designing and implementing business architecture.

● Suited for: Organizations looking for a foundational framework to understand and document the complexity of their

business architecture.

How to choose the right framework?

Selecting the right framework is a critical step in the successful implementation of business architecture. Here are some considerations to

help you choose:

● Organizational needs and goals: Understand the specific needs, objectives, and strategic goals of your organization.

Different frameworks may cater to different aspects of business architecture.

● Complexity of the business: Consider the complexity of your business. Larger, more complex organizations might benefit

from a more detailed and structured framework.

● Resources and expertise: Evaluate the availability of resources and expertise in your organization. Some frameworks may

require more intensive training and expertise than others.

● Integration with existing processes: Consider how the framework will integrate with existing processes and systems in your

organization. It should complement and enhance, not disrupt, existing workflows.

To implement business architecture effectively, choose the best approach by understanding different frameworks and aligning

them with your organization's needs.

Tools and technologies for business architects

In the dynamic field of business architecture, utilizing the appropriate tools and technologies is essential. These tools aid in the

meticulous design and documentation of business architecture, fostering enhanced collaboration, streamlined analysis, and informed

decision-making.

Below, we delve into the categories of tools that are pivotal for business architects, highlighting both traditional and modern utilities.

Traditional vs. modern tools

Traditional Tools

● Physical models and diagrams: In the past, experts used drawings and models on whiteboards to plan complex business

structures.

● Basic documentation tools: Spreadsheets and word processors helped record business architecture, making manual and

simple documentation.

Modern Tools

● Collaborative platforms: Business architecture now focuses on platforms that improve collaboration, with real-time updates

and smooth communication between teams.

● Cloud-based solutions: Cloud technology allows businesses to easily operate in different regions and setups, thanks to

scalable solutions.

Categories of tools

1. Enterprise architecture tools

These tools are comprehensive solutions designed to facilitate the design and modeling of business architectures. They offer

functionalities such as diagrammatic representation, reporting, and collaboration, providing a one-stop solution for business architects.

2. Diagramming tools

These are specialized tools that aid in creating diagrams, flowcharts, and visual representations of business architectures. The software has

user-friendly and teamwork features. It also allows for visual representation of business processes and structures. This is important

because it helps to explain complex information clearly and efficiently.

3. Project management tools

These tools are essential in overseeing projects, offering functionalities for tracking progress, managing tasks, and fostering collaboration

on projects. They provide a visual representation of tasks and progress, helping teams stay organized and aligned with the project

goals.

With the right tools, business architects can design, document, and manage business architectures, aligning with goals and promoting

collaboration.

Certifications

In the competitive landscape of business architecture, acquiring certifications can be a significant asset. Certifications not only validate a

business architect's role and skills but also enhance their credibility in the industry.

Here, we explore the importance of certifications and the general pathways one might consider.

Importance of certifications

● Professional credibility: Earning a certification in business architecture can bolster a professional's credibility, showcasing

their commitment and expertise in the field.

● Career advancement: Certifications can pave the way for career growth, opening opportunities for higher positions and roles

in organizations.

● Skill enhancement: Getting certifications helps professionals improve their skills and stay updated on the latest trends in

business architecture.

General pathways to certification

● Foundation courses: Many professionals start with foundation courses that offer a basic understanding of business

architecture concepts, principles, and practices.

● Advanced certifications: After learning the basics, professionals can choose advanced certifications that provide specialized

training in different areas of business architecture.

● Workshops and seminars: Attending workshops and seminars can boost knowledge and connect with industry peers, besides

formal certifications.

● Practical experience: Alongside certifications, accumulating practical experience in business architecture projects is vital.

Many certification programs require candidates to have a certain amount of practical experience.

● Industry recognition: When choosing a certification program, consider its recognition and standing in the industry. Opt for

programs that are well-regarded and have a good reputation.

● Curriculum: Check the certification program's curriculum to make sure it includes all important topics and provides

thorough business architecture training.

● Flexibility and accessibility: Look for programs that let you learn in different ways, like online, offline, or a mix. Make sure

the program is easy to use and lets you balance learning with other things you have to do.

By pursuing certifications in business architecture, professionals can carve out a successful career path, equipped with the knowledge and

skills to excel in the field.

Conclusion

Business architecture stands as a cornerstone in organizational strategy, offering a roadmap to align business objectives with operational

realities. As you venture deeper into this field, remember that the essence of business architecture lies in fostering agility, clarity, and

strategic alignment in organizations

The Product Portfolio

To be successful, a company should have a portfolio of products with different growth rates and different market shares. The portfolio

composition is a function of the balance between cash flows. High growth products require cash inputs to grow. Low growth products

should generate excess cash. Both kinds are needed simultaneously.

Four rules determine the cash flow of a product.

​ Margins and cash generated are a function of market share. High margins and high market share go together. This is a

matter of common observation, explained by the experience curve effect.

​ Growth requires cash input to finance added assets. The added cash required to hold share is a function of growth

rates.

​ High market share must be earned or bought. Buying market share requires an additional increment of investment.

​ No product market can grow indefinitely. The payoff from growth must come when the growth slows, or it never

will. The payoff is cash that cannot be reinvested in that product.

Products with high market share and slow growth are “cash cows.” Characteristically, they generate large amounts of cash, in

excess of the reinvestment required to maintain share. This excess need not, and should not, be reinvested in those products. In

fact, if the rate of return exceeds the growth rate, the cash cannot be reinvested indefinitely, except by depressing returns.
Products with low market share and slow growth are “pets.” They may show an accounting profit, but the profit must be

reinvested to maintain share, leaving no cash throwoff. The product is essentially worthless, except in liquidation.

All products eventually become either cash cows or pets. The value of a product is completely dependent upon obtaining a

leading share of its market before the growth slows.

Low market share, high growth products are the “question marks.” They almost always require far more cash than they can

generate. If cash is not supplied, they fall behind and die. Even when the cash is supplied, if they only hold their share, they are

still pets when the growth stops. The question marks require large added cash investment for market share to be purchased. The

low market share, high growth product is a liability unless it becomes a leader. It requires very large cash inputs that it cannot

generate itself.

The high share, high growth product is the “star.” It nearly always shows reported profits, but it may or may not generate all of

its own cash. If it stays a leader, however, it will become a large cash generator when growth slows and its reinvestment

requirements diminish. The star eventually becomes the cash cow, providing high volume, high margin, high stability, security,

and cash throwoff for reinvestment elsewhere.

The payoff for leadership is very high indeed, if it is achieved early and maintained until growth slows. Investment in market

share during the growth phase can be very attractive, if you have the cash. Growth in market is compounded by growth in share.

Increases in share increase the margin. High margin permits higher leverage with equal safety. The resulting profitability permits

higher payment of earnings after financing normal growth. The return on investment is enormous.

The need for a portfolio of businesses becomes obvious. Every company needs products in which to invest cash. Every company

needs products that generate cash. And every product should eventually be a cash generator; otherwise it is worthless.

Only a diversified company with a balanced portfolio can use its strengths to truly capitalize on its growth opportunities. The

balanced portfolio has:

​ stars whose high share and high growth assure the future;

​ cash cows that supply funds for that future growth; and

​ question marks to be converted into stars with the added funds.

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​ Competition Commission of India (CCI) is a statutory body of the Government of India responsible for enforcing the
Competition Act, 2002, it was duly constituted in March 2009. The Monopolies and Restrictive Trade Practices Act,
1969 (MRTP Act) was repealed and replaced by the Competition Act, 2002, on the recommendations of Raghavan
committee. Competition Commission of India aims to establish a robust competitive environment. o Through
proactive engagement with all stakeholders, including consumers, industry, government and international jurisdictions.
o By being a knowledge intensive organization with high competence level. o Through professionalism, transparency,
resolve and wisdom in enforcement. In May 2022, the finance minister participated in the 13th Annual Day
commemoration of the CCI. o Finance Minister also inaugurated the regional office at Kolkata and launched an
upgraded website of CCI. What is the Competition Act, 2002?

The Competition Act was passed in 2002 and has been amended by the Competition (Amendment) Act, 2007. It follows the
philosophy of modern competition laws. o The Act prohibits anti-competitive agreements, abuse of dominant position by enterprises
and regulates combinations (acquisition, acquiring of control and M&A), which causes or likely to cause an appreciable adverse effect
on competition within India. o In accordance with the provisions of the Amendment Act, the Competition Commission of India
and the Competition Appellate Tribunal have been established. o Government replaced Competition Appellate Tribunal
(COMPAT) with the National Company Law Appellate Tribunal (NCLAT) in 2017. What is the Composition of CCI? The
Commission consists of one Chairperson and six Members as per the Competition Act who shall be appointed by the Central
Government. The commission is a quasi-judicial body which gives opinions to statutory authorities and also deals with other cases.
The Chairperson and other Members shall be whole-time Members. Eligibility of members: The Chairperson and every other
Member shall be a person of ability, integrity and standing and who, has been, or is qualified to be a judge of a High Court, or, has
special knowledge of, and professional experience of not less than fifteen years in international trade, economics, business, commerce,
law, finance, accountancy, management, industry, public affairs, administration or in any other matter which, in the opinion of the
Central Government, may be useful to the Commission. What are the Functions and Roles of CCI? To eliminate practices having
adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in
the markets of India. To give opinion on competition issues on a reference received from a statutory authority established under any
law and to undertake competition advocacy, create public awareness and impart training on competition issues. The Competition
Commission of India takes the following measures to achieve its objectives: o Consumer welfare: To make the markets work for the
benefit and welfare of consumers. o Ensure fair and healthy competition in economic activities in the country for faster and inclusive
growth and development of the economy. o Implement competition policies with an aim to effectuate the most efficient utilization of
economic resources. o Develop and nurture effective relations and interactions with sectoral regulators to ensure smooth alignment of
sectoral regulatory laws in tandem with the competition law.

Effectively carry out competition advocacy and spread the information on benefits of competition among all stakeholders to establish
and nurture competition culture in Indian economy. The Competition Commission is India’s competition regulator, and an
antitrust watchdog for smaller organizations that are unable to defend themselves against large corporations. CCI has the authority to
notify organizations that sell to India if it feels they may be negatively influencing competition in India’s domestic market. The
Competition Act guarantees that no enterprise abuses their 'dominant position' in a market through the control of supply,
manipulating purchase prices, or adopting practices that deny market access to other competing firms. A foreign company seeking
entry into India through an acquisition or merger will have to abide by the country’s competition laws. o Assets and turnover above a
certain monetary value will bring the group under the purview of the Competition Commission of India (CCI). What are the
Judgements of CCI? CCI imposed a fine of ₹63.07 billion (US$910 million) on 11 cement companies for cartelisation in June 2012.
It claimed that cement companies met regularly to fix prices, control market share and hold back supply which earned them illegal
profits. CCI imposed a penalty of ₹522 million (US$7.6 million) on the Board of Control for Cricket in India (BCCI) in 2013, for
misusing its dominant position. o The CCI found that IPL team ownership agreements were unfair and discriminatory and that the
terms of the IPL franchise agreements were loaded in favor of BCCI and franchises had no say in the terms of the contract. CCI
imposed a fine of ₹10 million upon Google in 2014 for failure to comply with the directions given by the Director General (DG)
seeking information and documents. CCI imposed a fine of ₹258 crores upon Three Airlines in 2015. o Competition Commission of
India (CCI) had penalized the three airlines for cartelisation in determining the fuel surcharge on air cargo. CCI ordered a probe into
the functioning of Cellular Operators Association of India (COAI) following a complaint filed by Reliance Jio against the
cartelization by its rivals Bharti Airtel, Vodafone India and Idea cellular. The commission ordered an antitrust probe against Google
for abusing its dominant position with Android to block market rivals. This probe was ordered on the basis of the analysis of a similar
case in the EU where Google was found guilty and fined. CCI issued letters to handset makers in 2019, seeking details of terms and
conditions of their agreement with Google. o This is to ascertain if Google imposed any restrictions on them for using the company's
apps in the past 8 years from 2011. What are the Functions and Role of CCI?

To eliminate practices having adverse effects on competition, protect the interests of consumers and ensure freedom of trade in the
markets of India. To give opinion on competition issues on a reference received from a statutory authority To undertake competition
advocacy, create public awareness and impart training on competition issues. Consumer Welfare, to make the markets work for the
benefit and welfare of consumers. Ensure fair and healthy competition in economic activities in the country for faster and inclusive
growth and development of the economy. Implement competition policies with an aim to effectuate the most efficient utilization of
economic resources. Effectively carry out competition advocacy and spread the information on benefits of competition among all
stakeholders to establish and nurture competition culture in the Indian economy. What are the Achievements of CCI till now? The
Commission has adjudicated more than 1,200 antitrust cases i.e., case disposal rate is 89 % in antitrust cases. It has also reviewed more
than 900 mergers and acquisitions till date, cleared most of them, within a record average time of 30 days. The Commission has also
come up with several innovations like the ‘Green Channel’ provision for automated approval on combinations/transactions and
cleared more than 50 of such transactions. What are the Challenges? Challenges Posed by Digitization: As we didn’t have a robust
digital economy at the time of enactment of the Act (2002), CCI should understand the technological nuances of the new digital era.
Need For New Market Definition: India’s Commission needs to update its definition of market now. Since there are no boundaries in
the digital space, defining relevant markets has been a tough task for regulators around the globe. Threat From Cartelization: There is
a possibility of threat from cartelization. Since there is a global shortage of commodities due to the pandemic, and now, following the
war in Eastern Europe, the supply chain has been adversely affected. o There is a need to look into these and ensure that there are no
monopolistic/duopolistic tendencies leading to price rises and supply side manipulations.