business policy ppt 1

1. Presented by: Erika S. Nicolas, MBA

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.  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.  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.  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. 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 2000s
DOMINANT 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 Dynamic
CONCEPTS project appraisal investment planning. industry & analysis. sources of
& planning Synergy competition Case advantage
ECHNIQUES 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. Four Basic Elements

8. assess Strategy formulation Strategy implementation
environmental
factors
Conduct
Identify Develop
competitive
current specific
analysis: carry out maintain
mission strategies:
•strengths strategic strategic
and •corporate
•weakness plans control
strategic •business
•opportunity
goals •functional
•threats
assess
organisational
factors
6

9.  The process of conducting research and
gathering and assimilating external
information.
 It is also called “industry analysis”.

11.  Vision & Mission
 Opportunities & Threats
 Strengths & Weaknesses
 Long Term Objectives
 Alternative Strategies
 Strategy Selection
(for reading)

12. 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

13. Programs
Strategy Budgets/
Implementation Resource Allocation
Policies and Procedures

14. Action Stage of strategic
management:
• Most difficult stage
• Mobilizing employees and managers
• Interpersonal skills are critical
• Consensus on pursuing goals

15. 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

16. Strategy Evaluation
Internal Review
External Review
Performance Measurement
Corrective Action

17.  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)

18.  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.