Professional Documents
Culture Documents
Barlaan
BS-ENTRE 4-1
Business Policy
Professor Malanum
Strategic concept
The concept of strategy has been borrowed from the military and adapted for use in business. A
review of what noted writers about business strategy have to say suggests that adopting the
concept was easy because the adaptation required has been modest. In business, as in the
military, strategy bridges the gap between policy and tactics. Together, strategy and tactics
bridge the gap between ends and means (Figure 1). This paper reviews various definitions of
strategy for the purpose of clarifying the concept and placing it in context. The author's aim is to
make the concepts of policy, strategy, tactics, ends, and means more useful to those who
concern themselves with these matters.
Strategic management analyzes the major initiatives, involving resources and performance in
external environments, that a company's top management takes on behalf of owners. It entails
specifying the organization's mission, vision, and objectives, as well as developing policies and
plans which allocate resources to drive growth and profitability. Strategy, in short, is the
overarching methodology behind the business operations.
Formulation
Analysis Strategic analysis is a time-consuming process, involving comprehensive market
research on the external and competitive environments as well as extensive internal
assessments. The process involves conducting Porter's Five Forces, SWOT, PESTEL, and
value chain analyses and gathering experts in each industry relating to the strategy.
Strategy Formation Following the analysis phase, the organization selects a generic strategy
(for example, low-cost, differentiation, etc.) based upon the value-chain implications for core
competence and potential competitive advantage. Risk assessments and contingency plans are
also developed based upon external forecasting. Brand positioning and image should be
solidified.
Goal Setting With the defined strategy in mind, management identifies and communicates
goals and objectives that correlate to the predicted outcomes, strengths, and opportunities.
These objectives include quantitative ways to measure the success or failure of the goals, along
with corresponding organizational policy. Goal setting is the final phase before implementation
begins.
Implementation
Structure The implementation phase begins with the strategy in place, and the business
solidifies its organizational structure and leadership (making changes if necessary). Leaders
allocate resources to specific projects and enact any necessary strategic partnerships.
Feedback During the final stage of strategy, all budgetary figures are submitted for evaluation.
Financial ratios should be calculated and performance reviews delivered to relevant personnel
and departments. This information will be used to restart the planning process, or reinforce the
success of the previous strategy.
SWOT Analysis
SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses, and
for identifying both the Opportunities open to you and the threats you face.
Used in a business context, it helps you carve a sustainable niche in your market. Used in a
personal context Add to My Personal Learning Plan, it helps you develop your career in a way
that takes best advantage of your talents, abilities and opportunities.
Originated by Albert S Humphrey in the 1960s, the tool is as useful now as it was then. You can
use it in two ways as a simple icebreaker helping people get together to "kick off" strategy
formulation, or in a more sophisticated way as a serious strategy tool.
Strengths and weaknesses are often internal to your organization, while opportunities and
threats generally relate to external factors. For this reason, SWOT is sometimes called InternalExternal Analysis and the SWOT Matrix is sometimes called an IE Matrix.
To help you to carry out your analysis, download and print off our free worksheet, and write
down answers to the following questions.
Strengths
What advantages does your organization have?
What do you do better than anyone else?
What unique or lowest-cost resources can you draw upon that others can't?
What do people in your market see as your strengths?
What factors mean that you "get the sale"?
Consider your strengths from both an internal perspective, and from the point of view of your
customers and people in your market.
Weaknesses
What could you improve?
What should you avoid?
What are people in your market likely to see as weaknesses?
What factors lose you sales?
Again, consider this from an internal and external basis: Do other people seem to perceive
weaknesses that you don't see? Are your competitors doing any better than you?
Opportunities
What good opportunities can you spot?
What interesting trends are you aware of?
Useful opportunities can come from such things as:
Changes in technology and markets on both a broad and narrow scale.
Changes in government policy related to your field.
Changes in social patterns, population profiles, lifestyle changes, and so on.
Local events.
Threats
What obstacles do you face?
What are your competitors doing?
Are quality standards or specifications for your job, products or services changing?
Is changing technology threatening your position?
Do you have bad debt or cash-flow problems?
Key Points
SWOT Analysis is a simple but useful framework for analyzing your organization's strengths and
weaknesses, and the opportunities and threats that you face. It helps you focus on your
strengths, minimize threats, and take the greatest possible advantage of opportunities available
to you.
It can be used to "kick off" strategy formulation, or in a more sophisticated way as a serious
strategy tool. You can also use it to get an understanding of your competitors, which can give
you the insights you need to craft a coherent and successful competitive position.
When carrying out your analysis, be realistic and rigorous. Apply it at the right level, and
supplement it with other option-generation tools where appropriate.
Generic Strategies
Who is Michael porter?
Organizations that achieve Cost Leadership can benefit either by gaining market share through
lowering prices (whilst maintaining profitability) or by maintaining average prices and therefore
increasing profits. All of this is achieved by reducing costs to a level below those of the
organization's competitors.
Companies that pursue a Differentiation strategy win market share by offering unique features
that are valued by their customers. Focus strategies involve achieving Cost Leadership or
Differentiation within niche markets in ways that are not available to more broadly-focused
players.
SWOT ANALYSIS
Strengths
1. Strong management can help Infinitea reach its potential by utilizing strengths and
eliminating weaknesses. "Strong Management (Infinitea)" has a significant impact, so
an analyst should put more weight into it.
2. An innovative culture helps Infinitea to produce unique products and services that meet
their customers needs
3. Customers typically rebel against price increases by switching to competing products,
but if a company has pricing power, customers will continue using Infiniteas products
and services. Infinitea has the ability to charge customers higher price. "Pricing Power
(Infinitea)" has a significant impact, so an analyst should put more weight into it. "Pricing
Power (Infinitea)" will have a long-term positive impact on this entity, which adds to its
value. These statements will have a short-term positive impact on this entity, which adds
to its value.
4. A strong supply chain helps Infinitea obtain the right resources from suppliers and
delivery the right product to customers in a timely manner.
5. A strong brand name is a major strength of Infinitea. This gives Infinitea the ability to
charge higher prices for their products because consumers place additional value in the
brand.
Weaknesses
1. An inefficient work environment means that Infiniteas goods and services are not being
utilized properly.
2. Weak management increases business risks and reduces profits for Infinitea, because
they are responsible for the health of the business.
Opportunities
1. The online market offers Infinitea the ability to greatly expand their business. Infinitea
can market to a much wider audience for relatively little expense.
2. New products can help Infinitea to expand their business and diversity their customer
base.
3. Greater innovation can help Infinitea to produce unique products and services that meet
customers needs.
4. New markets allow Infinitea to expand their business and diversify their portfolio of
products and services.
5. International markets offer Infinitea new opportunities to expand the business and
increase sales.
Threats
1. Mature markets are competitive. In order for Infinitea to grow in a mature market, it
has to increase market share, which is difficult and expensive.
2. Consumers can change their tastes very quickly. Infinitea depends on knowing which
goods and services consumers want.
3. Intense completion can lower Infiniteas profits, because competitors can entice
consumers away with superior products.
4. Politics can increase Infiniteas risk factors, because governments can quickly
change business rules that negatively affect Infiniteas business.
5. Volatile costs mean Infinitea has to plan for scenarios where costs skyrocket.
Cautious planning leads to development delays that can negatively affect Infinitea.
"Volatile Costs (Infinitea)" has a significant impact, so an analyst should put more
weight into it. "Volatile Costs (Infinitea)" will have a long-term negative impact on this
entity, which subtracts from the entity's value. This statements will have a short-term
negative impact on this entity, which subtracts from its value. This qualitative factor
will lead to an increase in costs. This statement will lead to a decrease in profits.
"Volatile Costs (Infinitea)" is an easy qualitative factor to overcome, so the
investment will not have to spend much time trying to overcome this issue.
6. The availability of substitute products hurts Infiniteas ability to raise prices, because
customers can easily switch to another product or service.
The store owners monitors its inventory and buys merchandise depending on the number of
stocks available in their stock room
Advertising and Promotion
Downside
Foods like rice meals and desserts are included in its menu but are unavailable all the
time.
There are times that flyers are not available in the store.
People or Staff
5 employees
Customer Service and Selling
Drinks are served to the table
Music is provided
Provides wireless internet for the customer use
Promotes self-service when it comes to water and other utensils.
Facilities
Comfort Room available
The color scheme (combination of green and orange) and lighting (yellow light) of the
branch provides a relaxing atmosphere
Seats are available outside the store
Advertising and Promotion
The owner adds his regular customers, talk to them, and promote the stores upcoming
promotions.
Discounts are given to regular customers when he is at the store
Conclusion and Recommendation
1. CCTV camera
2. Standardize the store design and color
3. Offer more snacks and increase availability of some food products.