Strategic Management PPTs Unit 1 & 2

MBA III SEMESTER : BUSINESS POLICY AND STRATEGIC MANAGEMENT
Course No 301 Paper No. XVIII

MBA III SEMESTER
University Examination 50 Marks
Short Answer 10; Descriptive 20; Case 20
Internal Assessment 50 Marks
Tutorial 10; Test 20; Seminar 20
Total 100 Marks
Objectives:
To equip the students with analytical tools for
scanning the business environment in the dynamic
era.
The students will be benefited by acquiring new ways
and means of developing strategic decision making
skills.

Unit VI- Cases on the above Topics

1
Dr.N.C.Dhande SRTM University Nanded,
nishika.dhan@gmail.com
Unit I
Business policy- Evolution, meaning, concept and definition.
Concept of Corporate Strategy,
Importance of strategic management, Competitive advantages,
Strategy planning & decisions,
Strategic management process- Model-Vision-Mission,
Business definition- Goals & Objectives-
Balanced Scored card approach to Objectives- setting
key performance indicators,
Strategic Management different perspectives.

2
Business policy- Evolution, meaning, concept and definition
Business Policy defines the scope or spheres within which
decisions can be taken by the subordinates in an organization.
It permits the lower level management to deal with the
problems and issues without consulting top level
management every time for decisions.
Business policies are the guidelines developed by an
organization to govern its actions.
They define the limits within which decisions must be made.
Business policy also deals with acquisition of resources with
which organizational goals can be achieved.
It is the study of the roles and responsibilities of top level
management, the significant issues affecting organizational
success and the decisions affecting organization in long-run.

3
Features of Business Policy
An effective business policy must have following features-
Specific- Policy should be specific/definite. If it is uncertain, then the
implementation will become difficult.
Clear- Policy must be unambiguous. It should avoid use of jargons and
connotations. There should be no misunderstandings in following the policy.
Reliable/Uniform- Policy must be uniform enough so that it can be efficiently
followed by the subordinates.
Appropriate- Policy should be appropriate to the present organizational goal.
Simple- A policy should be simple and easily understood by all in the organization.
Inclusive/Comprehensive- In order to have a wide scope, a policy must be
comprehensive.
Flexible- Policy should be flexible in operation/application. This does not imply
that a policy should be altered always, but it should be wide in scope so as to ensure
that the line managers use them in repetitive/routine scenarios.
Stable- Policy should be stable else it will lead to indecisiveness and uncertainty in
minds of those who look into it for guidance.
4
Difference between Policy and Strategy
The term policy should not be considered as synonymous to the term
strategy.
Policy is a blueprint of the organizational activities which are
repetitive/routine in nature. While strategy is concerned with those
organizational decisions which have not been dealt/faced before in same
form.
Policy formulation is responsibility of top level management. While
strategy formulation is basically done by middle level management.
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.
A policy is what is, or what is not done. While a strategy is the
methodology used to achieve a target as prescribed by a policy.

5
Concept of Corporate Strategy
The word strategy is derived from the Greek word stratgos; stratus (meaning army)
and ago (meaning leading/moving).
Strategy is an action that managers take to attain one or more of the organizations
goals. Strategy can also be defined as A general direction set for the company and its
various components to achieve a desired state in the future. Strategy results from the
detailed strategic planning process.
A strategy is all about integrating organizational activities and utilizing and allocating
the scarce resources within the organizational environment so as to meet the present
objectives. While planning a strategy it is essential to consider that decisions are not
taken in a vacuum and that any act taken by a firm is likely to be met by a reaction from
those affected, competitors, customers, employees or suppliers.
Strategy can also be defined as knowledge of the goals, the uncertainty of events and
the need to take into consideration the likely or actual behavior of others. Strategy is
the blueprint of decisions in an organization that shows its objectives and goals,
reduces the key policies, and plans for achieving these goals, and defines the business
the company is to carry on, the type of economic and human organization it wants to
be, and the contribution it plans to make to its shareholders, customers and society at
large.
6
Features of Strategy
Strategy is Significant because it is not possible to foresee the future.
Without a perfect foresight, the firms must be ready to deal with the
uncertain events which constitute the business environment.
Strategy deals with long term developments rather than routine
operations, i.e. it deals with probability of innovations or new products,
new methods of productions, or new markets to be developed in future.
Strategy is created to take into account the probable behavior of
customers and competitors. Strategies dealing with employees will predict
the employee behavior.
Strategy is a well defined roadmap of an organization. It defines the
overall mission, vision and direction of an organization. The objective of a
strategy is to maximize an organizations strengths and to minimize the
strengths of the competitors.
Strategy, in short, bridges the gap between where we are and where
we want to be.

7
Strategy as the determinant of the long-term goals of the
enterprise. - Chandler
Strategy as the pattern of objectives, purposes, or goals and
plans for achieving these goals. - Andrews
Strategy as the common thread among a firms activities.
Ansoff
Strategy is a pattern in a stream of actions over time.
Mintzberg.
Strategies contain goals, policies, and action sequences.
Strategies develop around a few key concepts.
Strategies deal with the unpredictable and the unknowable.
Strategies require hierarchies of mutual support strategies.

8
9
Ploy
Plan 5 P of strategy
Pattern Perspective
Position
10
Intended Strategy
Unrealized
Strategy
Emergent
Strategy
Deliberate
Realized
Strategy
Different Kinds of Strategy
11
Military Axioms on Effective Strategy
*Have clear, decisive objectives.
-Maintain the initiative.
4Concentrate resources.
^Be flexible.
=Have coordinated and committed leadership.
=Achieve surprise.
Have an element of security.
13

The beliefs and values shared by people who work in
an organisation
How people behave with each other
How people behave with customers/clients
How people view their relationship with stakeholders
Peoples responses to energy use, community
involvement, absence, work ethic, etc.
How the organisation behaves to its employees training,
professional development, etc.

12
Vision where the organisation wants to go in the
future
Mission Statement summary of the beliefs of the
organisation and where it is now
The Vision
Communicating to all staff where the organisation is going
and where
it intends to be in the future
Allows the firm to set goals
Aims and Objectives:
Aims long term target
Objectives the way in which you are going to achieve the
aim
13
Strategic Planning
Once the direction is identified:
-Analyse position
-Develop and introduce strategy
-Evaluate:
Evaluation is constant and the results of the
evaluation feed back
into the vision

14
Strategic Planning
First Stage of Strategic Planning
may involve:
Futures Thinking
Thinking about what the
business might need to do 10
20 years ahead
Strategic Intents
Thinking about key strategic
themes
that will inform
decision making
The thicker the planning document,
the more useless
it will be
(Brent Davies: 1999)

Taking time to think and reflect
may be more important than many
businesses allow time for!
Copyright: Intuitives, http://www.sxc.hu
Analysis: SWOT
Strengths identifying existing organisational
strengths
Weaknesses identifying existing
organisational weaknesses
Opportunities what market opportunities
might there be for the organisation to
exploit?
Threats where might the threats to the
future success come from?
16
Analysis: PEST
Political: local, national and international political
developments how will they affect the organisation
and in what way/s?
Economic: what are the main economic issues both
nationally and internationally that might affect the
organisation?
Social: what are the developing social trends that
may impact on how the organisation operates and
what will they mean for future planning?
Technological: changing technology can impact on
competitive advantage very quickly!

17
Examples:
Growth of China and India as manufacturing centres
Concern over treatment of workers and the
environment in less developed countries who may be
suppliers
The future direction of the interest rate, consumer
spending, etc.
The changing age structure of the population
The popularity of fads like the Atkins Diet
The move towards greater political regulation of
business
The effect of more bureaucracy in the labour market
Political instability, social unrest ( TATA NANO)
Enviromental concerns over Mining VEDANT?
Jaitapur atomic plant Maharashtra, Mumbai Airport?
18
5 Forces
Developed by Michael Porter: forces that shape and influence the
industry or market the organisation operates in.
Strength of Barriers to Entry - how easy is it
for new rivals to enter the industry?
Extent of rivalry between firms how competitive
is the existing market?
Supplier power the greater the power, the less control the
organisation has on the supply of its inputs.
Buyer power how much power do customers
in the industry have?
Threat from substitutes what alternative products
and services are there and what is the extent
of the threat they pose?

19
Assignment
Apply PEST analysis to a business sector in and around your
town
Apply 5 forces analysis to a business you know
Apply SWOT for a new entrant business in an established
market

THANKS.
20

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MBA III SEMESTER : BUSINESS POLICY AND STRATEGIC MANAGEMENT

Course No 301 Paper No. XVIII

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