strategy and policy

1. STRATEGIES & POLICIES
Dr. TRIPTI SHARMA

2. STRATEGY & POLICIES
 Strategies are specific actions suggested to achieve the objectives. Strategies
are action oriented. In other words, we can say it is hard nut to crack. In case
of Strategic Management, Everyone is empowered to implement the strategy. It
is concerned with uncertainties, competitive situations, and risks etc that are
likely to take place at a future date. Strategy is deployed to mobilize the
available resources the best interest of the company.
 Policy deals with routine/daily activities essential for effective and efficient
running of an organization. While strategy deals with strategic decisions.
Policy is concerned with both thought and actions. While strategy is concerned
mostly with action. Polices are the guidelines. In case of Policies Power is
delegated to the subordinates for implementation. Policy is an overall guide
that governs and controls the managerial action.

3. MINTZBERG’S 5PS OF STRATEGY
 The 5 Ps: 1. Plan 2. Ploy 3. Pattern 4. Position 5. Perspective
By explicating and using five definitions, we may be able to
remove some of the confusion, and thereby enrich our ability to
understand and manage the processes by which strategies form -
The field of strategic management cannot afford to rely on a
single definition of strategy. The word has been used implicitly
in different ways even if it has traditionally been defined
formally in only one. This theory presents five definitions of
strategy and considers some of their interrelationships.

4.  1. Strategy as Plan: Strategy as a plan is the most common
definition of strategy. It implies that strategies are made in advance
and that they are developed consciously and purposefully. That
definition can be related to military definitions, game theory,
management and the dictionary.
 2. Strategy as Ploy: Strategy can also be a ploy – for example
used to threat, send signals into the market, to bargain or to outwit
an opponent or competitor. Porter has covered some of those ploys
and devoted chapters in his books to: market signals, competitive
moves and defensive strategies

5. 3. Strategy as Pattern: Defining strategy as a plan is not enough. Strategy needs
to be realized and made into a pattern. Strategy is consistency in behaviour,
whether or not intended. People form strategies with their actions. Consistency or
pattern in a stream of actions creates a strategy. Points out the relationship
between: Intended strategy, Deliberate Strategy, Emergent Strategy, Unrealized
Strategy and Realized Strategy. Most commonly referred to usage of resources
but also products and processes, customers and citizens, social responsibilities
and self-interest.
4. Strategy as Position: Strategy can also be a means of locating the
organization in the competitive environment. In that way the strategy becomes a
link or a mediating force between the organization and the environment. Strategy
as a position does not address the competitive environment. It can be a head-on
competition of two players or it can be a player in the market. The position can
also be about avoiding or keeping the competition away (Blue ocean). The
strategy could also be pursued.

6. The strategy could also be pursued to promote cooperation between
organizations, even would-be competitors. These collaborations range from
informal arrangements to joint ventures and mergers.
5. Strategy as Perspective: Strategy viewed as an ingrained way of perceiving
the world, a common and shared company perspective. Strategy in this respect is
to the organization what personality is to the individual. That could be the
character of the organization. The definition suggests that strategy is a concept.
Every strategy is invented and exists only in the minds of interested parties that
pursue them. A collective mind – Individuals united by common thinking and/or
behaviour. A major issue is therefore how to read the collective mind and
understand how intentions diffuse through the system.

7. CONCEPT OF CORPORATE STRATEGY
 Corporate strategy is a unique
plan or framework that is
long-term in nature, designed
with an objective to gain a
competitive advantage over
other market participants
while delivering both on
customer/client and
stakeholder promises (i.e.
shareholder value).

8. CORPORATE STRATEGY
Corporate level strategies are basically about the choice of
direction that a firm adopts in order to achieve its
objectives. Corporate strategy is essentially a blueprint
for the growth of the firm. The corporate strategy sets the
overall direction for the organization to follow.
 There are four types of corporate strategies: Stability
Strategy, Expansion Strategy, Retrenchment
Strategy and Combination Strategy. The corporate
level generic strategies pertain to identify the businesses
the company shall be engaged in.

9.  Stability Strategy: A stability business strategy seeks to maintain
operations and market size and position. This strategy is characteristic of
small risk-averse firms or firms operating in a very precarious market that
is comfortable with its current position.
a) No Change Strategies - For example, firms operating in niche markets
commonly choose a niche (cost or differentiation) strategy and maintain
that strategy until internal or external factors necessitate a change.
b) Profit Strategies - This may include cutting costs (operational efficiency,
outsourcing), selling assets, raising prices, increasing output (sales), or
offsetting losses with profits from another business unit.).
c) Caution Strategies - This strategy requires a firm to wait and continue to
assess the market before employing any particular strategy.
 Expansion Strategy: An expansion strategy is synonymous with a growth
strategy. A firm seeks to achieve faster growth, compete, achieve higher
profits, grow a brand, capitalize on economies of scale, have greater
impact, or occupy a larger market share. This may entail acquiring more
market share through traditional competitive strategies, entering new
markets, targeting new market segments, offering new produce or services,
expanding or improving current operations.

10. a) Expansion through Concentration - Concentration might include:
penetrating an existing market with an existing value proposition;
developing a new market by attracting new customers to an existing in
value proposition; developing a new value proposition to introduce in the
existing market.
b) Expansion through Diversification - This strategy involves diversifying
the value offering of the company in one of two methods: 1) Concentric
Diversification entails developing a new value proposition that are related
to existing value propositions; or 2) Conglomerate Diversification entail
entering into new markets (either with an existing value proposition or by
combining with another industry competitor).
c) Expansion through Integration :
i. Vertical integration involves consolidation up or down the value chain.
ii. Forward vertical integration involves consolidating closer to the point at
which value is delivered to the consumer.
iii. Backward vertical integration involves consolidating closer to the genesis
of value (such as the point of manufacturing).
iv. Horizontal integration involves consolidating operations at the same
point in the value chain.

11. Expansion through Cooperation - This strategy entails working closely
with a competitor (while potentially still competing against them in the
market). Working together may take the form of consolidation of business
units (mergers or acquisitions), strategic alliance (affinity group or
association), or joint venture (loose partnership-like alliance generally used
to undertake a project or enter into foreign markets).
Expansion through Internationalization - This option is preferable
when there is little room for expansion in domestic markets.
1) International Strategy - focusing on offering a value proposition in a
foreign country without modification of differentiation
2) Multi-domestic Strategy - involves modifying or differentiating a
product to make it attractive or suitable to foreign markets
3) Global Strategy - focuses on delivering the standardized value
proposition in countries where there is a low cost structure for delivery
4) Transnational Strategy - employs both a global and multi-domestic
strategy by modifying or differentiating a product in foreign markets.
Retrenchment strategy: A redemption strategy seeks to restructure, sell
or otherwise divest a business unit. The purpose is to reduce costs,
streamline operations, or stabilize cash flow.
a) Turnaround Strategy - This is a restructuring strategy. It calls for
realigning operations to be more cost efficient or profitable. It often
comes in response to an ineffective strategy causing harm to the
company.

12. b) Divestment Strategy - This means reducing operations or completing
divesting (getting rid of) a business unity. Generally, the operational unit
will be losing money or not fit with the companys core operational
objectives. Some the drivers of this strategy are negative cash flows,
sustained losses, poor business integration, better alternative use of
assets, the value proposition is becoming obsolete, rising costs, or small
(non-growing) market share.
c) Liquidation Strategy - liquidation sees a business unit as a loss or
failure. Scenarios leading to a liquidation strategy include: extensive losses,
lack of profitability, failure of a current strategy, obsolete assets, or
technology, ineffective processes, obsolete value proposition, poor
management, or lack of integration of the business unit.
Combination Strategy: A combination strategy employ any simultaneous
combination of other master strategies. It includes use by a firm of a
different strategy in individual business units or by use of multiple
strategies in a single business unit at the same or different times. This is
most popular in large, complex organizations (various industries and
business units).

13. ROLE OF CORPORATE STRATEGY
 Corporate strategy identifies barriers to achieving company
objectives and develops an approach that allows you to
overcome the obstacles. When several individual departments
implement strategies, corporate actions lack coordination and may
act at cross-purposes. For example: McDonald’s …..
 What is McDonald's corporate strategy?
 McDonald's strategic plan focuses on a long-term outlook to
deliver meaningful growth and increase guest counts, a reliable
measure of the Company's strength that is vital to growing sales and
shareholder value. We are targeting opportunities at the core of
McDonald's — food, value and the customer experience.

14. BASIC CONCEPT OF STRATEGIC MANAGEMENT
AND BUSINESS POLICY

15. FORMULATION OF STRATEGY,
 Strategy formulation is the process of using available knowledge
to document the intended direction of a business and the
actionable steps to reach its goals. This process is used for
resource allocation, prioritization, organization-wide alignment, and
validation of business goals. What is strategic formulation example?
 Strategy formulation requires a series of steps performed in
sequential order. The steps must be taken in order because they build
upon one another. ... For example, you will pay attention to what
your competition is doing and make adjustments to your
strategic plan as necessary throughout the process.

16. STEPS OF STRATEGIC FORMULATION
 1) Write a Vision Statement. ...
 2) Mission Statement. ...
 3) Define the company profile. ...
 4) Study the External environment. ...
 6) Deciding the actions for accomplishing the
mission of the organization.
 7) Selecting long term strategies which will be
most effective.

17. TYPES OF STRATEGIES AND POLICIES
 Competitive Strategy: Firstly,
competitive strategy is the first
of the kinds of strategies in
strategic management.
 Corporate Strategy
 Business Strategy
 Functional Strategy
 Operating Strategy
 Organizational Policies: these
refer to the overall policies of
the organization.
 Functional policies.
 Originated policies.
 Appealed policies.
 Imposed policies.
 General policies.
 Specific policies.
 Implied policy.
STRATEGIES POLICIES

18. FAQ
 What are the major kinds of strategies and policies in
management?
 Different kinds of strategies and policies cover the areas
of growth, finance, organization, personnel, public
relations, products or services and marketing.
Michael Porter has outlined the business-level strategies
of overall cost leadership, differentiation, and focus, that
may be adopted by firms.

19. CONTROLLING AND DECISION MAKING
Controlling measures the deviation of actual performance from the
standard performance, discovers the causes of such deviations and helps
in taking corrective actions . Decision making can be defined as
selecting between alternative courses of action.
 The decision‐making process involves the following steps:
 Define the problem.
 Identify limiting factors.
 Develop potential alternatives.
 Analyze the alternatives.
 Select the best alternative.
 Implement the decision.
 Establish a control and evaluation system.

20. USE OF OPERATIONS RESEARCH IN INVENTORY
CONTROL
 The stock of goods may be kept in the following
forms: 1. Raw Material 2. Semi finished goods 3.
Finished goods.
 Uses of operations research
 Scheduling and time management.
 Urban and agricultural planning.
 Enterprise resource planning (ERP) and supply
chain management (SCM).
 Inventory management.
 Network optimization and engineering.
 Packet routing optimization.
 Risk management.

21. DEMAND FORECASTING
 Demand Forecasting is a systematic and scientific
estimation of future demand for a product. Simply,
estimating the sales proceeds or demand for a product in
the future is called as demand forecasting. ... This
method is often used when the forecasting of a demand is
to be done for a short period of time.
 Some real-world practical examples of Demand
Forecasting are – A leading car maker, refers to the last
12 months of actual sales of its cars at model, engine
type, and color level; and based on the expected growth,
forecasts the short-term demand for the next 12 month
for purchase, production and inventory planning

22. FAQ:
 How can you increase demand?
 What Does a “Demand Increase Strategy” Do?
 Make Your Product Needed.
 Boost Your Brands Awareness.
 Show Potential Customers the Benefit of Choosing You.
 Leverage 'Scarcity' to Create Demand.
 Take Advantage of Video Marketing.
 Try Out Partner Marketing.
 Update Your Blog Regularly.
 Share Guest Posts.

23. ADVANCE ISSUES IN MANAGEMENT
 Corporate Social Responsibility and Ethics :Key CSR
issues: environmental management, eco-efficiency,
responsible sourcing, stakeholder engagement, labour
standards and working conditions, employee and community
relations, social equity, gender balance, human rights, good
governance, and anti-corruption measures.
 Ethical issues include conflicts of interest, bribes, conflicts of
loyalty, and issues of honesty and integrity.

24.  5 Ways To Solve The Crisis Of Corporate Social
Responsibility
 Forge a real strategic connection. ...
 More upfront involvement and ownership from causes. .
 Shift to long term focus versus short term. ...
 Commit more than just financial resources. ...
 Integrate programs instead of operating in silos.

25. LIBERALISATION-PRIVATISATION-
GLOBALISATION
A. Liberalisation is the process or means of the elimination of control
of the state over economic activities. It provides a greater autonomy
to the business enterprises in decision-making and eliminates
government interference. Economic liberalization refers to the
reduction or elimination of government regulations or restrictions on
private business and trade. ... For example, the European Union has
liberalized gas and electricity markets, instituting a competitive
system.
B. Privatization describes the process by which a piece of property or
business goes from being owned by the government to being
privately owned. It generally helps governments save money and
increase efficiency, where private companies can move goods quicker
and more efficiently. For example: In the state of Washington
before 2012, the liquor sales were controlled and
operated by the government. ... However, in 2012, the
government privatised liquor sales. After privatisation,
private businesses could sell liquor to the general public.

26.  LPG stands for Liberalization, Privatization, and Globalization. India under
its New Economic Policy approached International Banks for development of
the country. These agencies asked Indian Government to open its restrictions
on trade done by the private sector and between India and other countries.
C) Globalisation is the process by which the world is becoming increasingly
interconnected as a result of massively increased trade and cultural exchange.
•Globalisation has increased the production of goods and services. For example:
Its challenges include uneven unbundling, discriminatory third party access,
insufficient independency of national regulator, consolidation and anti-competitive
behaviour of incumbents or abuse of one's dominant position on the market.
•Positive impacts of LPG policy: - The GDP growth rate can be increased. ...
Negative impacts of LPG policy: - Agriculture sector can be ignored.
Some adverse consequences of globalization include terrorism, job insecurity,
currency fluctuation, and price instability.

27. ISSUES OF LPG REFORMS
 The reforms were mainly for the formal sector of the economy, the
agricultural sector, the urban informal sector and forest depending
communities were untouched by the reform. This resulted in Uneven
economic growth and unequal distribution of wealth.
 Economic liberalization in the organized manufacturing industries
(subjected to strict labour laws) has led to very little employment.
 Market-based reforms led to the economic disparity between the rich class
and the poor class.
 Social Sectors like Health, education were ignored in this reform which
has led to poor health sector development and lousy educational growth.
 Economic reforms have pushed up the growth of the economy but have
miserably failed to generate adequate employment.

28. KNOWLEDGE MANAGEMENT
 Knowledge management (KM) is the process of creating,
sharing, using and managing the knowledge and
information of an organization.
 The three most common challenges of knowledge
management relate to: Obsolete technology; Employee
motivation; and. Making information easy to find.
 Top 5 Knowledge Management Challenges and How
to Handle Them
 Managing community engagement. ...
 Encouraging people to share their knowledge. ...
 Facilitating collaboration among team members and
different teams. ...
 Measuring knowledge contribution and rewarding active
users.

29.  11 Knowledge Management Challenges Managers
Face
 Getting and Keeping People Motivated. ...
 Keeping up with Ever-Changing Technology. ...
 Measuring Knowledge Contribution. ...
 Security. ...
 Keeping Shared Information up to Date and Accurate. ...
 Interpreting Data Effectively. ...
 Ensuring Relevancy. ...
 Rewarding Active Users.
 Knowledge Management Solutions: Knowledge
Management Systems. Knowledge Management Systems
are the integration of technologies and mechanisms
that are developed to support the four KM
processes (discovery, capture, sharing, application).

30. FAQ
 What are the ethical issues in knowledge
management?
 In the case of knowledge storage and retrieval,
there are key concerns such as privacy of
information, confidentiality of information,
access to information, security of
information, and accountability of
information, all of which are important ethical
considerations .

31. CHANGE MANAGEMENT
 Change management is a systematic approach to dealing with
the transition or transformation of an organization's goals,
processes or technologies. The purpose of change management
is to implement strategies for effecting change, controlling
change and helping people to adapt to change
 change management issues arise because you are dealing with
people, and change in people. We all have our own beliefs and
values, and we all have to understand change and believe in this.
If we don't see the benefit and vision, then we will simply not
want to change and will create natural barriers

32. Challenges of Managing Change (and how to deal with them)
1) Managing multiple teams. ...
2) Differentiating the needs of multiple sites. ...
3) Updating appropriate documents to align with changes. ...
4) Juggling multiple simultaneous changes. ...
5) Lacking visibility into your change processes.

33. MANAGEMENT BY OBJECTIVE
(MBO).
 A management buyout (MBO) is a transaction
where a company's management team purchases
the assets and operations of the business they
manage.
 MBO: Define organizational goals: Setting
organizational goals is very important. ... For
example, if you work in customer service,
your goals could be to increase customer
satisfaction by 13% and reduce customer call
times by two minutes.

34.  Some of the problems and limitations associated with MBO are as explained
below:
 Lack of Support of Top Management: ...
 Resentful Attitude of Subordinates: ...
 Difficulties in Quantifying the Goals and Objectives:
 Costly and Time Consuming Process: ...
 Emphasis on Short Term Goals: ...
 Lack of Adequate Skills and Training
 In order to achieve all the advantages of MBO, the following suggestions should be
implemented:
 Top Management Support and Commitment
 Clear Goal Setting:
 Participative Goal Setting:
 Overall Philosophy of Management:
 Decentralization of Authority: ...
 Revision and Modification Goals: ...
 Orientation and Training of Executives.

35. CASE STUDY: MCDONALD'S CORPORATION
 McDonald's Corporation is an American fast food organization
established in 1940 as a café by Richard and Maurice McDonald, in San
Bernardino, California, United States. They rechristened their business
as a burger stand and later transformed the organization into an
establishment; the Golden Arches logo being presented in 1953 at an
area in Phoenix, Arizona.
 Ray Kroc, a businessperson, joined the organization as an establishment
operator in 1955 and continued to buy the chain from the McDonald's
siblings. McDonald's had its base camp in Oak Brook, Illinois, and
moved its worldwide base camp to Chicago in mid-2018.

36. CASE STUDY: MCDONALD'S CORPORATION
 McDonald's is the world's biggest eatery network by revenue, serving more
than 69 million clients day by day in more than 100 countries crosswise
over 37,855 outlets as of 2018. Although McDonald's is best known for its
burgers, cheeseburgers, and french fries, it menu also includes chicken
items, breakfast things, sodas, milkshakes, wraps, and sweets. In light of
changing buyer tastes and a negative backfire on account of the
wretchedness of its food, the organization has added mixed greens, fish,
smoothies, and natural products in its offerings.
 McDonald's Corporation's income originates from leases and charges paid
by the franchisees. According to two reports distributed in 2018,
McDonald's is the world's second-biggest private manager with 1.7 million
representatives (behind Walmart with 2.3 million workers).
 Also read: full history, strategy, mission ,vision growth
restaurants and services and future prospects from google.

37. QUES:
 Q1. Summarize the given case.
 Prepare a strategic plan.
 2.Prepare SAP (strategic advantage profile) of company.
 3. ETOP analysis of company?

38. 7 STEPS GIVEN BY ROBERT STEVEN
 Who …………………………………..?
 What …………………………………..?
 When…………………………………..?
 Where………………………………….?
 Whom…………………………………..?
 Why…………………………………….?
 How……………………………………..?
 These points are helpful to summarize and solve
the case.