Bp chap1


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business policy ppt 1

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Bp chap1

  1. 1. Presented by: Erika S. Nicolas, MBA
  2. 2.  Derived from the Greek word strategos which means “the general’s view” (the CEO’s view). In business context, the idea of strategy, therefore, suggests a big perspective on the firm and its context. It is a comprehensive master plan that states how the corporation will achieve its mission and objectives
  3. 3.  Policy is a broad guideline for decision making that links the formulation of strategy with its implementation whereas a strategy is a comprehensive plan that states how a corporation will achieve its mission. Policies are the means by which annual objectives will be achieved whereas strategies are the means by which long term objectives will be achieved.
  4. 4.  Policies are guides to decision making and address repetitive/recurring situations whereas strategies are potential actions that require top management decisions and large amount of the firm’s resources. Policies include guidelines, rules & procedures established to achieved stated objectives whereas strategies (business) include, geographic expansion, diversification, acquisition, product development, market penetration, retrenchment, divestiture, liquidation and joint venture.
  5. 5.  It is defined as the art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives. It is synonymous with the term “strategic planning” which is commonly use in the business world.
  6. 6. The Evolution of Strategic Management The Evolution of Strategic Management 1950s 1960s Early-mid Late1970s Late 1980s Late 1990s 1970s early 1980s early 1990s early 2000sDOMINANT Budgetary Corporate Corporate Analysis of Quest for Strategic THEME planning & planning strategy industry & competitive innovation control competition advantage The “New Economy” MAIN Financial control Planning growth Diversifica- Positioning Competitive Innovation & ISSUES ion advantage knowledge Budgeting Forecasting & Portfolio Analysis of Resource DynamicCONCEPTS project appraisal investment planning. industry & analysis. sources of & planning Synergy competition Case advantageECHNIQUES market competences Knowledge share management cooperation Emphasis on Rise of Diversifi- Industry/market Restructuring Virtual orga-MPLEMENT- financial corporate planning cation. selectivity. BPR. nization. ATION management departments Quest for Active asset Refocusing Alliances & formal global management Outsourcing Quest for planning market share critical mass
  7. 7. Four Basic Elements
  8. 8. assess Strategy formulation Strategy implementation environmental factors ConductIdentify Develop competitivecurrent specific analysis: carry out maintainmission strategies: •strengths strategic strategicand •corporate •weakness plans controlstrategic •business •opportunitygoals •functional •threats assess organisational factors 6
  9. 9.  The process of conducting research and gathering and assimilating external information. It is also called “industry analysis”.
  10. 10.  Vision & Mission Opportunities & Threats Strengths & Weaknesses Long Term Objectives Alternative Strategies Strategy Selection(for reading)
  11. 11. Issues include: • What new businesses to enter • What businesses to abandon • How to allocate resources • Expand operations or diversify • Enter international markets • Merge or form joint venture • Avoidance of hostile takeover
  12. 12. Programs Strategy Budgets/Implementation Resource Allocation Policies and Procedures
  13. 13. Action Stage of strategic management: • Most difficult stage • Mobilizing employees and managers • Interpersonal skills are critical • Consensus on pursuing goals
  14. 14. Final stage of strategic management: • All strategies subject to future modification • Success today is no guarantee of success tomorrow • Success creates new and different problems • Complacency leads to demise
  15. 15. Strategy Evaluation Internal Review External Review Performance Measurement Corrective Action
  16. 16.  Allows company to be more proactive Allows company to initiate and influence activities It promotes unity to the organization It helps the employees and managers understand other’s view and what the organization is doing and why. Thus, commitment to the company becomes stronger.(require more reading)
  17. 17.  More profitable and successful Shows significant improvement in sales, profitability and productivity. Exhibit long term financial performance Good anticipation of short and long term consequences.