Business policy and strategic Management

Strategy and Strategic Management Strategic intent- Vision, Mission, goals and objectives SWOT Analysis Environmental appraisal Organizational Appraisal Corporate level strategy Business level strategy Strategic Analysis and choice Porter’s competitive Analysis Value chain Analysis

Need of BPSA Enormous change is taking place in Business

Environment both internal and external. Competition is almost cut throat in all sectors Considering the changes and competition

organization need t formulate the strategies an polices which will help them to survive in the market.

Crunch of the resources required for the business. Need strategies to utilize the resources at optimum level.

Business policy

“Guidelines which business need to follow considering the impact of internal and external environmental factors.”

Importance For learning the course For understanding the business

environment For Understanding the organization For personnel Development

Purpose of Business Policy

To integrate the knowledge gained in various functional areas of Management

To adopt a generalist approach to problem solving

To understand the complex interlink ages operating within an organization

Strategy Definitions The determination of the basic long term

goals and objectives of an enterprise and the adoption of the course of action and the allocation of resources necessary for carrying out these goals

The unified , comprehensive and integrated plan designed to assure that the basic objectives of the enterprise are achieved.

Corporate office

SBU A SBU B

Personnel

Production

Finance

SBU C Corporate level Strategies

Business unit Level Strategies

Functional Level Strategies

Different Levels of Strategy

Strategic Management Definitions

A stream of decisions and actions which leads to the development of an effective strategy or strategies to help achieve corporate objectives…….Glueck

The process which deals with the fundamental organizational renewal and growth with the development of strategy, structure , and system necessary to achieve such renewal and growth, and with the organizational system needed to effectively manage the strategy formulation and implementation processes……Hofer and others

Formulation of Strategies ( Environmental Appraisal, Organizational Appraisal) ( SWOT Analysis Porters competitive Analysis, value Chain)

Strategic Analysis and Choice(BCG matrix, Nine cell Matrix, Experience Curve

Industry Analysis, Competitive Analysis

Strategic Implementation

Strategic Evaluation

Strategic Management Process

grand strategies

Stability explanations

Retrenchment

Vision

Mission

Goals

Objectives

Strategies and tactics

Strategic Intent

vision

“ to be in the future”

Description of something in the future

Mental perception of the kind of environment organization aspires to create within a broad time of horizon and the underlying conditions for the actualization of this perception

Benefits of Vision

Inspiring and exhilarating Helps to create shared sense of purpose Vision which is unique, competitive an

original make sense in the marketplace. Foster risk taking and experimentation Foster long term thinking Clear the objectives of the organization

Process on Envisioning

Core Ideology Envisioned future Tata Steel “ Tata steel enters the mew millennium

with the confidence of a learning, knowledge based and happy organization. We will establish ourselves as a supplier of choice by delighting our customer with our service and our product”

Mission what is our business? what to do? What should it be? Definition

“Essential purpose of the organization ,concerning particularly why it is in existence, the nature of the business it is in, and the customers it seeks to serve and satisfy

Characteristics of a Mission Statement

It should be feasible It should be precise It should be clear It should be motivating It should be distinctive It should indicate major component

of strategy It should indicate how objectives are

to be accomplished.

United Trust of India

Mission: “To keep the common man in

sharper focus, to encourage saving and investment habits among them.”

Goals And Objectives

Goals Goals denote what an organization hopes to

accomplish in a future period of time. This is stated broadly

Objectives These are the ends that specify how goals shall

be achieved Objectives makes the goals operational Objective need to be stated in quantity They are measurable and comparable

Role of objectives

I t defines he orgnisation’s relationship with the environment

It helps to pursue its vision and mission Provides the base of strategic decision

making It provides the standards for the

performance appraisal

Characteristics of objectives objectives should be understandable objectives should be concrete and specific objectives should be related to a time

frame objectives should be measurable and

controllable objectives should be challenging objectives should be correlated with each

other objectives should be set within constraint

Issues in objective setting

Specificity Multiplicity Periodicity Variability Reality Quality

What objective are set Market standing Innovation Productivity Physical and financial resources Profitability Manager performance and

development Worker performance and attitude Public responsibility

How objectives formulated

The forces in the environment Realities of enterprise’s resources The value system of top executives Awareness of the management

Examples of Objectives Corporate level 1.to Increase the profit level by 5 % at the end

of two year

Business Unit level 1.to Increase the profit level of the unit by 10

% at the end of two year

Functional level To increase the sales of product by 12 % by

the end of two year To reduce the manpower cost by 15% of the

last year

Critical Success Factor(CSF)

The factors which are crucial for organizational success

Toothpaste: four qualities-form, flavour,foam and freshness

Shoe: High manufacturing qualities, cost efficiency, sophisticated retailing.

Automobile: High technology- mileage, low maintains

“Key success factors”