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Solution for Ongc Case Study on Strategy Management

In: Business and Management

Submitted By ironeagles
Words 1040
Pages 5
Strategy management * Prof. Sunil Sharma

Date: April 9, 2014
Value chain of business * It’s a decision of an organization that how much of value chain it wants to occupy. * An organization may go for backward, forward or vertical integration in value chain * An organization may decide to go from one value chain to other value chain * From economists’ point of view in a competitive market, there will be atleast 3-4 competitors of equal caliber and market share would not be more than 35% for a given company. In theory there has to be numerous competitors for a perfectly competitive market.
Case: ONGC India – In search of new growth strategy
ONGC has gone for vertical integration during Mr. Raha’s tenure. Mr. Sharma has to decide whether to continue with the same or differ.
Pros:
1. The bullish market earned lot of fortune. The earned money can be easily invested into diversification and hence multiplicate from this investment in future. 2. If they see investments in renewable sources of energy, ONGC can also start to be looked upon as green company. 3. When Mr. Subir Raha took over the workforce was highly de-motivated, and all the cash that had been earned would be given back to government in form of dividends. Mckinskey had projected that ONGC would go sick if it continues to operate the way it operates now. Mr. Raha saw an opportunity in the additional cash of Rs. 18,400 was seen as opportunity to create new business & new challenges for the organization, motivating the staff by giving them new challenging positions and hence re-invent the organization.
Cons:
1. The growth in Raha regime looks phenomenal. Sales turnover from Rs. 0.2 Bn to Rs. 0.6 Bn in 6 yrs. Similarly profits have gone from Rs. 86 Mn to Rs. 211 Mn. However, most of the growth story is not due to improvement in production (crude oil 23 MMT to 24 MMT,…...

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