Week 23

1) In your own words and using referenced quotes describe what is meant by the term “Strategic Leadership”.

Strategic leadership can be defined as someone who can anticipate, envision, maintain flexibility, and empower others to create strategic change as necessary. A manager with strategic leadership skills exhibits the ability to guide the company through the new competitive landscape by influencing the behavior, thoughts, and feelings of co-workers, managing through others and successfully processing or making sense of complex, ambiguous information by successfully dealing with change and uncertainty (I. o. C. A. o., 2010).

2)  Identify two interesting similarities and two differences between the 5 Elements of successful and Effective Strategic Leadership model and the Transcendent Leadership model

Two interesting similarities of 2 elements of successful and effective strategic leadership model and the Transcendent Leadership model are:

•  Both of these models focus on maintaining good relationship among leader and their follower.
• Main objective of both leadership style is to achieve company's goals and objectives

Two differences are:

• Lynch model is more focused on motivating and rewarding employees whereas Transcendent Leadership model believes in managing the relation between leaders and followers.
• Lynch model mainly focuses on people within the organization whereas Transcendent model focuses on nonhuman elements like strategy, structure, rules and procedures.

3. How would you describe Jeff Bezos strategic leadership style?

Is there evidence that he demonstrate all the elements of strategic leadership from the two

Models? Which elements are strongly evident in the case and which less so?

(Think about all five elements of the Lynch model and all three elements of the transcendent leadership model)

I think Jeff Bezos demonstrates all the elements of strategic leadership from the two models. The Lynch model focuses more on activities within an organization and transcendent leadership model talks both inside and outside of organization. Jeff Bezos is focused about maintaining a best working environment which leads to organizational effectiveness likewise effectively communicating with external stakeholders about their long term views.

According to him, the interest of stakeholders and the customers are essential factors for the growth of the company and must focus on doing good job for company rather bothering about competitor's plan. He frequently gives interview so that he could communicate with the stakeholder's and let them know about how company is operating and what are their principles.

Although he did not talk about rewarding his employees and leadership of self but still I think he is a perfect character to describe as strategic leader who posses all the elements which are required by Lynch model and Transcendent leadership model.

(Source: Crossan, M., Vera, D and Nanjad, L. (2008) Transcendent Leadership: strategic leadership in dynamic environments, T)

References:

Crossan, M., Vera, D and Nanjad, L. (2008) Transcendent Leadership: strategic leadership in dynamic environments, T

India, I. o. C. A. o., 2010. Strategic Management. New Delhi: Sahitya Bhawan Publications.

 Lynch,  R., (2009) Strategic Management, 5th Edition, Prentice Hall, chapter 16

Week 22

1) What is your understanding on the Balanced Score Card approach? How useful is it for the Companies?

Balanced Score card is used to check how the strategy obtained can be applied throughout the organization. It can be used by managers to make sure whether employees are executing the task properly or not (Pro.N,2013). Some of the benefits of using Balance Score card are as follows:

• Provides a comprehensive view of the whole organization
• It drives changes in organizational behavior/ performance
• It gets everyone focused and aligned to the organization’s strategy
• People will use it & support it because people support what they help build
• It allows effective communication of strategy throughout the organization
• It captures the value of business both tangible & intangible
• It adds discipline and structure to the day-to-day organizational operations
• It is very flexible and adaptable

2) Identify and list the 20 important KPIs of Balanced Score Card.

20 important KPIs of Balanced Score Card are:

Financial Perspective:

•  Return on Capital
• Economic value added
• Sales growth
• Cost reduction
• Cost of goods sold

Customer Perspective:

• Customer satisfaction
• Customer retention
• Acquisition of new customers
• Concern classification
• Average resolution time
• Customer service chart count

Internal Perspective:

•  Manufacturing cost
• Job turnover
• Product quality
• Stock turnover and inventory management
• Average order size

Future Perspective:

•  New product development record
• R&D core competencies
• Employee retention
• Employee profitability

3) Present your thoughts and understanding on the article “The Strategic Management process”

In a hyper competitive marketplace, companies can operate successfully by creating and delivering superior value to target customers and constantly adapting to changing business environment. So to meet changing conditions in their industries, company must develop long-term strategies. Strategic Management is required to create competitive advantage and to guide company successfully through all changed in the environment (I. o. C. A. o., 2010).

Although strategic management has 7 stages but it can be summarized in 5 different stages that are:

•  Setting Vision and Mission
• Setting objectives
• Creating a strategy to achieve the objectives
• Implementing the chosen strategy effectively.
• Evaluating performance and add corrective measures

References

pro, N., 2013. Balanced Score card Kenya. [Online]
Available at: http://balancedscorecardkenya.com/why-balanced-scorecard/
[Accessed 2013].

Lynch,R (2012) Strategic Management 6thed. Chapter 13

India, I. o. C. A. o., 2010. Strategic Management. New Delhi: Sahitya Bhawan Publications.

Week 21

  1.      What are the benefits and drawbacks of taking an ‘emergent’ approach to strategy making?

By choosing 'emergent' strategy it leads a business to provide what the market actually wants, rather than what the owner or executive's thinks or believes the market wants. This approach requires that the organization maintain the flexibility, particularly at the owner or executive level, to embrace the new strategy.

Drawback of 'emergent' strategy is this approach works only on ongoing organizational activity. This approach does not offer a genuine alternative to more traditional intended strategy follower. (Dontigney, 2013)

2.      Was Honda’s entry strategy in the US more deliberate or emergent?

Honda's strategy seems like an emergent approach. Although they thought that Americans would love heavy and big motorcycles and were emphasizing on selling 250cc and 305cc bikes, people were more interested in Supercubs type which was small 50cc bike.

3.      Which of the accounts seems more accurate and why? Why do you think the two accounts differ so much?

The second account seems more accurate because it is based on an interview with Honda executives and they have provided all the reasoning for succeeding and failure in US market.

The two accounts differ because the first article is based on the research done by a consultant group i.e. Boston consulting group and the second article is based on the interview with executives of company itself.

4.      Did Honda’s entry strategy demonstrate the characteristics of ‘logical incrementalism’?

Yes, I think Honda's strategy demonstrates characteristics of 'logical incrementalism'.

Environmental Uncertainty:

In Japan, Honda was more popular because of its light weight segments bike but when they entered US market they had to adapt to US market where heavy bikes were preferred. Likewise, they also had to advertise widely to change people's mindset about bike riders; they spent spent $1 million in advertisement with slogan “You Meet the Nicest People on a Honda.” People were inspired and started to buy the bikes.

General Goals:

They had no strategy other than the idea of seeing if they could sell something in the United States. It was a new frontier, a new challenge for them to fit in. They did not calculate the profits and only wanted to succeed in the market.

Experimentation:

Honda's larger bikes were not robust enough for American riders and they started having engine failures. While waiting for the engineers to upgrade the design, the staff in the U.S. continued to hit the streets. They rode around doing errands in Los Angeles on Honda's small lightweight bike, the 50cc Super Cub. The success of the Super Cubs eventually translated into success with larger bikes, and Honda went from no presence at all in the U.S. market in 1959 to 63% of the market.

5.      Do you think Honda would have been more or less successful if they had adopted a more formalised strategic planning approach to the launch?

No, I don't think Honda would have been more successful if they had adopted more formalized strategic planning because while entering into new market one must never over-plan and stick with emerging approach and change according to what market wants. This doesn't mean being goal less, but market can be unpredictable so company must always be ready to tackle changes.

References:

 Johnson, Whittington and Scholes (2011) Exploring Strategy, 9th Edition, Pearson Education, Chapter 12

Dontigney, E., 2013. yourbusiness.azcentral.com. [Online] 

Available at: http://yourbusiness.azcentral.com/advantage-disadvantage-emergent-strategy-15781.html
[Accessed 2013].

Activity Week 20

Week 18

1. How can using the Change Kaleidoscope and Force-field analysis help an organisation to deliver its intended strategy?

Change Kaleidoscope is a model which analyses whether the organization requires any change or not. The kaleidoscope contains an outer ring which shows the features which supports limits or remains neutral during change and inner ring which has implementation options to change agents. there are eight contextual features of change kaleidoscope, which are: (proworkproject.com,2013).

Time:	How quickly is change needed? Is the organisation in crisis or is it concerned with longer-term strategic development?
Scope:	What degree of change is needed? Does the change affect the whole organisation or only part of it?
Preservation:	What organisational assets, characteristics and practices need to be maintained and protected during change?
Diversity:	Are the different staff / professional groups and divisions within the organisation relatively homogeneous or more diverse in terms of values, norms and attitudes?
Capability:	What is the level of organisational, managerial and personal capability to implement change? Is there a need to improve this capability before the change process can be started?
Capacity:	How much resource can organisation invest in the proposed change in terms of cash, people and time?
Readiness for change:	How ready for change are the employees within the organisation? Are they both aware of the need for change and motivated to deliver changes?
Power:	Where is the power vested within the organisation? How much latitude of discretion does the unit needing to change and the change leader possess?

Force Field Analysis is used to evaluate various forces which are for and against a projected change. After evaluating the pros and cons of projected change, we can make strategies to eradicate forces which are against and strengthen the supporting forces. This model can be used to identify important stakeholders of organization or identifying competitors and partners.

2. Use the Change Kaleidoscope to describe and analyse the change context at Hewlett-Packard at the time of Meg Whitman’s arrival in September 2011.

HP was in desperate need of change, although 3 CEO's were changed within two and half years there was no sign of change or let's say company was struggling for right direction.

Time: 

Although Meg Whitman says it will take five years to change things in HP, I think some immediate changes are required. As profit of the company is lowering every year we can say that company is in crisis. Likewise, some directors and employees are used to traditional organizational culture which needs to be changed immediately.

Scope:

Some extent of change is required for current situation. Poor management team, leadership style, and employee autonomy has seized creativity and barely innovated anything. Previous CEO Hurd says, "HP has been operated with an eye toward the short term", which shows company needs to strategize for long term and start working on employee motivation, work environment and ethics of employees.

Preservation:  

After when Whitman came she changed the parking system of organization, likewise when HP opened customer meeting center it looked modern and impressed many people, but the oak tree which William Hewlett and David Packard planted in 1960s was still there which shows new CEO's philosophy making today's HP like what it was back then. But Whitman must surely work on employee's characteristics and be strict towards directors or managers who are leaking vital information of the company.

Diversity:

In my opinion, staffs and professional groups of the company are diversified. Some of the employees are not willing to make their company better. As there is a dispute among directors so it is obvious employees motivation and attitude towards company will be negative which needs to be changed.

Capability:

HP surely has capability to change; it was no.10 on the fortune 500 and has sales of $127billion in 2011. Employees of the company are highly qualified but due to poor management system they are not able to give their best. Managerial capability must be changed to stop down fall of the company 

Capacity:

If company can use their people's capability to full extent they don't have to exploit other resources. As the profit of the company is falling every year they must work on a very short to regain its earlier position.

Readiness:

At first employees were not happy with the new CEO but they were surely aware of need of change for the betterment of the company. If the new CEO help these employees to be motivated and create good impression by changing some negative forces of company, employees can commit to implement changes.

Power:

Company has always emphasized on employee autonomy, but due to poor management team employees cannot work well. Although company must start working for long term some immediate changes on management team and leadership style must be changed.

References:

Johnson, Whittington and Scholes (2011) Exploring Strategy, 9th Edition, Pearson Education, Chapter 14

Hope Hailey V, Balogun,J., (2002), 'Devising context sensitive approaches to change: the example of Glaxo Wellcome.', Long Range Planning, 35(2), p.153-178 

Week 17

1. Can you think of an organization that has implemented a ‘high risk strategy’ that has resulted in success (why was it high risk at the time and why was it a success – was it good luck or good judgement)?

I think Samsung entering into mobile phone market was high risk strategy and has resulted in success. Before 2000 Samsung were more focused on home appliances and in early 2000 they entered into mobile phone market for the first time. During their time of entrance they could not compete with other well established mobile companies like Nokia, Motorola and Sony Ericsson. Later in mid 2000 when the trend of Smartphone was growing Samsung went from selling zero phones to quarterly sales of 50 million units in two years. In 2008 Samsung took no.1 spot in U.S. mobile market and now it has the largest market share in mobile phone market with 32.1% market share (Samsung, 2013).

2. Now, do the same for an organization who embarked on a high risk strategy that resulted in some sort of failure (why was it high risk and why did it fail – bad luck or poor judgment?)

I have chosen Kingfisher Airlines as an organization which embarked on a high risk strategy and resulted in some sort of failure. Although most of the management gurus and experts say the failure of Kingfisher Airlines is because of global recession of 2008 but there were other many reasons behind the failure. First of all, the owner of the company Mr. Vijay Mallya didn't take suggestions on business operations and didn't involve any skilled executives in decision making process. Likewise, he squandered the opportunity of attracting middle class families by projecting Kingfisher as elite or executive class airlines. The major cause of failure of this company was because of poor judgment made by the executives or owner.

References:

G. Johnson and K. Scholes (eds), Exploring Techniques of Analysis and Evaluation in Strategic Management, Prentice Hall, 1998.

Johnson, Whittington and Scholes (2011) Exploring Strategy, 9th Edition, Pearson Education, Chapter 14 

Samsung, 2013. Samsung.com. [Online]
Available at: http://www.samsung.com/in/aboutsamsung/
[Accessed 25 11 2013].

Week 16

     1.   In your own words and using referenced quotes describe the difference between organic growth, merger & acquisition and strategic alliance.

Organic growth:

It is a process of expanding firm's operation from its own resources or following concept of 'do it yourself'. In this approach growth of the company can be slower than others. It is an attractive option for small-business who wants to expand business but don't have excess amount of liquid capital (Mack, 2013).

Merger and Acquisition:

The term 'merger' might be used when two companies of roughly equal size get together and collect their resources. The term 'takeover' or 'acquisition' would be more likely to be used where a large company purchases a smaller company. Nevertheless, whether the event is termed as merger or an acquisition the activities of two companies are combined into single entity (Lumby & Jones, 2013).

Strategic Alliance:

It is a process of undertaking a beneficial project by t an arrangement between two companies mutually. In this approach both companies collect their resources to make a separate business unlike merger and acquisition where resources are collected to make two different business same.  A strategic alliance could help a company develop a more effective process, expand into a new market or develop an advantage over a competitor, among other possibilities.

    2.      Give an example of a company that has grown through a) organic growth, b) merger or acquisition and c) strategic alliance

Organic Growth:

Tiffany & Company also uses a three-prong-growth-initiative strategy. Tiffany is the leading luxury jewelry brand in the United States and ranks second in the world. The company operates through 167 locations globally and generates over $2.6 billion in revenue. Its growth strategy has been a combination of top-line and bottom-line initiatives. First, Tiffany expanded geographically. Next, it introduced new products annually across its jewelry lines and then moved to capture value along the jewelry supply chain by vertically integrating its diamond business. Then, it added new distribution channels and more designer jewelry. Finally, Tiffany created IRIDESSE, its new pearl jewelry store chain, which it is now scaling. (Hess, 2013)

Merger and Acquisition:

Google has acquired about 130 companies from 2001 to 2013 and most popular amongst them was acquiring YouTube in 2006 for $ 1.65 billion.

Strategic Alliance:

Samsung and many other mobile brands have made a strategic alliance with Google for android operating system.

    3.      Briefly discuss the merger between Britvic and AG Barr. What advice would you give to the new Board?

The combination of AG Barr and Britvic is said to be a merger, with management coming from both companies. It is structured as an acquisition of Britvic by Barr and Barr will own 37 percent of combined company but will contribute 16 percent of sales and 23 percent profits. This acquisition will make £35 million of annual cost saving and 23 percent of combined operating profit. As operating margins and earnings per share of Barr is greater than Britvic, latter's management should benefit of it.

Some advices to the new board are:

• Introducing new independent brand
• Promoting new brand effectively
• Effective flow of information between board members
• Effective market research to find out new market segment

Case study

1) Evaluate the case for the merger

                         I.            What are the positives and benefits? What should work well?

Some positives and benefits of mergers are:

• Annual cost savings of £35 million
• Operating profit of 23 percent
• Relationship with Pepsi
• Chance to sell drinks to Britvic's customers
• After valuation Britvic's share price might increase

With formation of new company they can emerge as a new competitor to other soft drink producing companies.

                        II.        What are the negatives and potential risks? What problems might occur?

There is no assurance whether the new company can perform well, utilize advantages gained from acquisitions and achieve expected growth. Likewise, there can be problem while valuating the share price of two companies. Competition with Coke can be tough and could be taken as a potential risk for failure.

III.    What advice would you give the newly formed Board?

Some advices to the new board are:

•  Introducing new independent brand
• Promoting new brand effectively
• Effective flow of information between board members
• Effective market research to find out new market segment

References

Mack, S., 2013. smallbusiness.chron.com. [Online]
Available at: http://smallbusiness.chron.com/organic-growth-strategy-57130.html

Lumby, S. & Jones, C., 2013. Corporate Finance. 7th ed. s.l.:South Western Cenage Learning.

Hess, E. D., 2013. www.edhltd.com. [Online]
Available at: http://www.edhltd.com/articles_OGlessons.htm

Presentation on Bhutan

BHUTAN- Land of Thunder Dragon

The SAARC Perspective:

• South Asian Association for Regional Cooperation (SAARC) was established in 1985.
• Formed as non-political forum to create cooperation among Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.
• Platform for the people of South Asia to strive towards socio-economic progress in a spirit of friendship, trust and understanding.
• Afghanistan joined the organization in 2005.
• South Asian Free Trade Area (SAFTA) was introduced in 2004 at the 12^th SAARC summit in Islamabad.

Bhutan’s SAARC Perspective:

• Joining SAARC was politically significant for a small nation-state like Bhutan.
• Bhutan was compelled to extend its relations with countries other than India to consolidate its status as the sovereign nation that it has been historically.
• His Majesty said at the first SAARC summit in 1985: “We have to bear in mind that in spite of all our heterogeneity, we are geographically one homogeneous unit, that our peoples have lived together in peace and friendship for countless centuries, and that they share many values rooted in our common past.”
• As a member of SAARC Bhutan has been able to diversify its trade link with South Asian countries while enhancing its status as an independent nation-state.

About Bhutan:

•      Location: Southern Asia, between China and India, Landlocked

•      Area: 38, 394 sq. km

•      Nationality: Bhutanese

•      Population: 716,896

•      Ethnic Groups: Bhote 50%, Nepalese 35%, Indigenous or migrant tribes 15%

•      Religions:  Lamistic Buddhist 75%, Indian and Nepalese- influenced Hinduism 25%

•      Language: Dzongkha (Official)

National Flag of Bhutan

National Emblem of Bhutan

            H.M. Jigme K.N. Wangchuck

            H.E. Jigmi Y. Thinley

Economic Review:

Other SAARC Nations and Relations:

India

•      It is the largest country among the SAARC nations.

•      Economically very strong

•      Acts like father figure among SAARC nations.

Relationship with Bhutan:

• Bilateral cooperation in the hydropower sector has been carried forward with the formal inauguration of the 60 MW Kurichhu Hydroelectric project in April 2006, and commissioning of the 170 MW first unit of 1020 TALA Hydroelectric Project in July 2006.
• In Joint Session of the Bhutanese Parliament in May 2008, Prime Minister Dr. Manmohan Singh informed that the total bilateral economic engagement with Bhutan over the next five years to be of the order of Rs./ Nu. 100 billion.
• India is not only Bhutan's main development partner but also its leading trade partner.
• A free Trade regime exists between India and Bhutan. The India-Bhutan Trade and Commerce Agreement which expired in March 2005, has been renewed for a period of 10 years. Currently, the major items  of exports from Bhutan to India are electricity (from Tala, Chukha and Kurichhu Hydroelectric Project), base metals and articles, minerals, vegetable fat and oils, alcoholic beverages, chemicals, cement, timber and wood products, cardamom, fruit products, potatoes, oranges and apples, raw silk, plastic and rubber products.

Nepal

•      Like Bhutan it is also landlocked and known as “Country of Himalayas”

•      Known for Birth Place of Buddha

Relationship with Bhutan:

• The growth of trade between Nepal and Bhutan has been affected due to the refugee crisis.
• In 2008-09, Bhutan's exports to Nepal stood at Rs. 300 million, while Nepal's exports to Bhutan amounted to Rs. 200 million.
• Bhutan and Nepal are landlocked Himalayan countries with close social and cultural linkages.
• Bhutan and Nepal both are predominantly agricultural countries. However, there exists scope for increasing bilateral trade, cultural exchanges and cooperation in the field of tourism.

Bangladesh

•      It is second most populous country in SAARC

•      Second largest exporter to third countries among SAARC countries

•      It is the world’s largest contributor to United Nations peacekeeping operations.

Relationship with Bhutan:

• Bhutan and Bangladesh signed a treaty and bilateral trade agreement in 1980, granting each other the "most favored nation" preferential status for development of trade. 
• In the renewed agreement, Bangladesh gave free access to 18 major categories of import items from Bhutan.
• The Bangladeshi Prime Minister also promoted the importing of electricity generated in Bhutan, and proposed a Bhutan-Bangladesh bus service across the territories of India.

Pakistan

•      It is the only sovereign country in South Asia.

•      It is the second largest country among SAARC nations.

Relationship with Bhutan:

• Non- resident diplomatic relation was established in 1988.
• There is not a high degree of bilateral cooperation between the two countries.
• Bhutanese nationals have attended various programs , trainings and courses in Pakistan under the funding schemes of UNDP, World Bank, UNESCO , UNICEF and so on.
• Over the years, various levels of official visits have taken place in relation to SAARC agendas as well as meetings arranged by UN agencies.

Sri Lanka

•      Best known for Democratic Socialist Republic country.

•      It is an island situated in northern Indian Ocean.

•      Attractive destination for tourists.

Relationship with Bhutan:

• Both countries are rich in Buddhist tradition and non-resident diplomatic relation established in 1987.
• Thimpu served as the venue for talks between representatives of the Sri Lankan Government and six Tamil groups including the Tamil United Liberation Front.
• Under SAPTA, Sri Lanka has agreed to grant Bhutan a special tariff import rate for apples, concessions for oranges, processed fruits, and wood products.
• Likewise, Bhutan has agreed to grant concessions on the import of tyres, chocolates and semi-precious stones from Sri-Lanka.
• Government of Sri Lanka also sponsor for various courses, training and programs in Bhutan.

Maldives

•      It is also an island country in Indian Ocean.

•      It is the smallest country among SAARC Nations.

•      Attractive destination for luxurious tourists.

Relationship with Bhutan:

• Formal diplomatic relation between Bhutan and the republic of Maldives is established on 20^th July, 1984.
• Cultural cooperation was signed in during president Gayoom ‘s visit to Bhutan in 1987.
• Maldivian government has made technical cooperation by sponsoring nurses at Royal Institute of Health Sciences in Bhutan and trained Bhutanese in hotel and catering services.
• There has been a steady stream of visits made by Bhutanese and Maldivian officials.
• In 1987, his Majesty presented a contribution of Nu. 1 million towards relief operations in the aftermath of a tidal wave disaster in Maldives.

Afghanistan

•      Became SAARC member in 2005.

•      Largely affected by terrorism.

•      Countries security is under supervision of NATO force.

Relationship with Bhutan:

• The Islamic Republic of Afghanistan established diplomatic and consular relations with the Royal Government of Bhutan on April 20, 2010.
• They are not involved in any kind of trade.

Problem Areas:

• For two decades, Bhutan has failed to live up to its assurances that it will resolve its refugee problem. 
• There are a number of environmental issues in Bhutan. Among Bhutan's most pressing issues are traditional firewood collection, crop and flock protection, and waste disposal, as well as modern concerns such as industrial pollution, wildlife conservation, and climate change that threaten Bhutan's population and biodiversity.
• Although Bhutan and India share an extraordinary friendship, there are some issues that are of concern to both countries. These are mainly centered on the illegal presence of militants in Bhutan rebelling against the Indian government, the state of relations with China, and (more exclusively for Bhutan) the liberalization policies in India.
• Rural areas, where at least 90 percent of the poor are concentrated, lag behind cities in infrastructure, health, education and other social services, and urban problems are growing worse as well.

Strategic Perspective & understanding about other nations:

• Although Bhutan has excess hydro power energy to distribute other SAARC nations, they are still backward in modern technology infrastructure so they need to cooperate with other SAARC nations to develop technological infrastructure.
• Bhutan must emphasize on industrialization to create more job opportunities for youth of nation.
• One of the major GDP contributors of Bhutan is exporting herbal products; if they can establish their own herbal pharmaceutical companies it will help in economic growth of nation.
• In order to attract more tourists, Bhutan must make flexible policies relating tourism industry.
• As it is an agricultural country it must adapt to modern methodology of agriculture.

PEST Analysis:

Political: 

• Bhutan has a hereditary monarchy.
• Major reforms and innovations started from 1990 through the successful leadership of Wangchuck dynasty.
• Bhutan has diplomatic relation with 21 countries and with the European Union.
• Bhutan is member of various international and regional organizations such as United Nations, SAARC, IBRD, IMF and ABD.
• India is single largest trading and development partner of Bhutan.
• Bhutan does not have diplomatic relation with china.

Economic:

• Historically, Bhutanese economic activity was confined to subsistence farming and animal husbandry.
• Total land under cultivation is around 8% of the total geographical area and it contributes around 21% share to GDP.
• Bhutan has done significant progress in national economy through the development on hydro electricity. Some of the major hydro projects are:

•      Chukha Hydropower Project  - 336 mw

•      Tala Hydropower Project- 1020 mw

•      Kurichhu Hydropower Project-60 mw

•      Basochhu Hydropower Project- 64 mw

• Due to good development of hydropower projects many of the rural areas of Bhutan are gaining significant growth on infrastructure.

Social:

• Population of Bhutan is 716,896
• Ethnic groups: Bhote 50%, ethnic Nepalese 35%, indigenous or migrant tribes 15%
• Religion: Lamastic Buddhist 75%, Indian and Nepalese influenced Hinduism 25%
• GDP-Per Capita(PPP) : $6200
• Population below :poverty line: 23.2%
• Literacy Rate: 47%

Technology:

• Bhutan is still behind in modern technological facilities.
• Telephone - Main line in use :26,300
• Telephone - mobile cellular : 394,300
• Internet User : 40,000
• Broadcast and Telecast Stations: Radio- AM 0, FM 9, Shortwave 1
• Television broadcast stations 1

Strategic Grouping:

As most of the SAARC nation's economy is based on agriculture and agriculture has been a major GDP contributor for countries like Nepal, Bhutan, Afghanistan, and Pakistan. Therefore, strategic grouping has been done on the basis of contribution of agriculture on GDP.

SWOT Analysis of Bhutan:

STRENGTH

• Agricultural Market-organic farming
• Rural labor force
• Cultural and religious importance

WEAKNESS 

• Low economic growth rate
• Low trade of various goods and services

OPPORTUNITIES

• Huge possibilities of job opportunities
• Increase in per capita income
• FDI

THREAT

• Loss of small cottage industries
• Decline in environment and quality of labor
• Threat of financial crisis

Solution and Reboot:

• Bhutan should show some flexibility to solve the refugee problem with the help of good mediator.
• Use of clean energy should be encouraged for domestic purpose. As it’s the initial stage for the development of industrialization and construction work, it is very important to make far sighted plan to control pollution and environmental degradation.
• In this globalized scenario, Bhutan should be more open to other nations beside India also. It will make Bhutan more competitive and there will not be question and risk on national sovereignty.
• Bhutan should not only think about the development of Gross Domestic Product but it is very important to take some serious major to develop Gross Domestic Happiness.

Strategic Leadership Aspect:

• Bhutan has huge Hydropower potential.
• Hydropower is the largest renewable energy sources in Bhutan.
• Hydropower potential is estimated at 60,000 MW.
• Total estimated Renewable energy resources of Bhutan are given

Possibility of Success:

• Hydroelectricity
• Tourism
• Herbal Products – Pharmaceuticals Cosmetics
• Processed Food – Petty Consumer Items, beverages
• Textiles, organic products and tea

References

•     Trading economics., 2013. trading economics.com [Online] Available at: www.tradingeconomics.com
[Accessed 20 10 2013].

• Global energy observer., 2013. globalenergyobservatory.org [Online] Available at: globalenergyobservatory.org [Accessed 20 10 2013].

•   Global Finance., 2013. [Online] Available at: http://www.gfmag.com/gdp-data-country-reports/212-nepal-gdp-country-report.html#axzz2guyeh1uT [Accessed 19 10 2013].

•  Bhutan 2008., 2008. [Online] Available at: http://www.bhutan2008.bt/en/image/tid/4 [Accessed 21 10 2013].

•    IDE JETRO., 2013. [Online] Available at: http://www.ide.go.jp/English/Publish/Download/Jrp/pdf/132_3.pdf
[Accessed 21 10 2013].