BUSINESS POLICY AND

STRATEGIC MANAGEMENT
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Strategy - Purpose
 Business: Survive and Grow
 Non Business Organization: Effectively
discharge the purpose for which it is
formed
Business Policy
 Study of the functions and responsibilities
of senior Management, the crucial
problem that affect success in the total
enterprise and the decisions that
determine the direction of the organization
and shape its future.
Christensen
Business Policy
 Study of functions and responsibilities of
the senior Management related to the
organizational problems that affect the
success of the organization as a whole
 Future course of action
 Choice of purpose and defining what
needs to be done in order to mould the
character and identity of the organization
Business Policy
 Mobilization of resources for the
attainment of goals
Strategy
 The term ‘Strategy’ is derived from the
Greek word ‘Strategos’ , which means
generalship – the actual direction of
military force.
 Strategy means the art of general.
Strategy
 Defined as, “Where the organization wants
to go to fulfill its purpose and achieve its
Mission, it provides the framework for
guiding choices which determine the
organization’s nature and direction and
these choices related to the organization’s
products or services, markets, key
capabilities, growth, return on capital
employed and allocation of resources.”
Strategy
 Integrated set of actions aimed at securing
a sustainable competitive advantage.
 Hierarchy of Strategy:

Corporate Business Functional

Level Level Level
Strategy
 Sustainable Competitive Advantage

Cost Leadership Differentiation Focus

Strategic Management
 Dynamic process of formulation,
implementation, evaluation and control of
strategies to realize the organization’s
strategic intent
Strategic Management

Formulation Implementation
Strategic Strategic
Of Of
Intent Evaluation
Strategies Strategies
Strategic Intent
 Vision
 Mission
 Goals
 Objectives
 Plans
VISION
 Broad category of long term intentions that
the organization wishes to pursue
 It is a dream, the aspirations the
organization holds for its future
 Ideal Vision statement
 Broad, all inclusive
 Aspirations for future
 A dream shared across the organization
VISION- Polyhydron Pvt Ltd.
 “ We are an ethically Managed
Organization. We will not exploit our
customers, employees, suppliers,
Government, society and nature”
VISION: AIRTEL
 “ To make mobile communication a way of
life and be the customers’ first choice
VISION - INDSEARCH
 “Develop world-class Management
professionals to meet the diverse and
challenging demands of business, industry
and society
VISION - NTPC
 “ To be one of the world’s largest and best
power utilities, powering India’s growth
 NASA

 “ To improve life here, To extend life to

there, To find life beyond.”
MISSION
 Mission statement makes the Vision
statement more tangible and
comprehensible
 Mission statement clearly specifies:

 Why organization exists?

 What differentiates the organization?

 Basic beliefs, values and philosophy

MISSION- Polyhydron Pvt. Ltd.
 We will create an island of Excellence
through focus on Customer, Employee
Empowerment and continuous
improvement
MISSION - AIRTEL
 “ We will meet the mobile communication
needs of our customers through A] Error
free service delivery B] Innovative
products and services C] Cost efficiency
and D] Unified messaging solutions
MISSION- IndSearch
 Provide international knowledge
environment that will enthuse and
encourage students and faculty to develop
sustainable competencies in emerging
global business scenario.
CORE VALUES
 Core Values of the organization represent
the commonly held beliefs, mindsets and
assumptions that shape how work is done
in an organization.
 Core Values are derived out of the
MISSION of the organization.
GOALS
 Goals provide the basis for actions
towards the achievements of the
organization’s MISSION in the form of
specific milestones.
 Goals are both, financial and non-financial
and specify the route that the organization
takes to achieve its MISSION & VISION
OBJECTIVES
 Objectives are operational definitions of
the organization’s Goals.
PLANS
 Specific actions that will be taken by the
organization in order to achieve the
objectives.
 Plans specify the roles to be performed by
the members of the organization and
resource allocation across sub units of the
organization and departments along with
the priorities and schedule of activities.
Formulation of Strategies-
Reliance
 Acquisitions in polyester segment for increase in
capacity by 25%, which is more than double of
the nearest competitor
 Petrochemicals second growth platform
 Petroleum Refining Capacity from 0.66 to 1.24
million barrels per day
 Eight New Discoveries during the year, 40% of
India’s total indigenous production
Reliance
 Identification Of Two Growth Avenues
 Fostering Rural Prosperity Through
Organized Retailing
 Alternative Energy
Strategies- Infosys
 Continuous Improvement in Global Delivery
Model [GDM]
 Substantial Investments In Infrastructure And
Processes
 Developing Sophisticated Project Management
Technology For Ensuring Timely, Consistent
and Accurate Delivery Of Superior Quality
Solutions For High Level Customer Satisfaction
Infosys
 Increase Business From Existing And New
Customers
 Global Presence
 Investment In Infrastructure & Employees
 Enhance Solutions Set
 Deep Industry Knowledge
 Enhance Brand Visibility
 Pursue Alliance and Strategic Alliance
 Maintain Financial Strength
Formulation of Strategies
 Value Chain Analysis
Firm Infrastructure Value
Human Resource Management
Technology Development
Procurement
Inbound Operations Outbound M & S Service
Logistics Logistics
Formulation of Strategy
Environmental Internal Analysis
Analysis
Opportunities & Threats Strengths &
Weaknesses
Fix Internal Competencies With External Opportunities

Firm’s Strategies
Environmental Analysis
 It is the aggregate of all conditions,
events and influences that surround an
organization and affects it.
 Six Mega Trends likely to shape India’
future
1. Trend of acquiring the scale
2. Spread of connectivity and awareness
Environmental Analysis
3. Growing Problems of Growth
4. Increasing the openness to the world
5. Growth of Middle Class
6. Continuing Dominance of Youth
Environmental Analysis
 Characteristics of Environment
1. Complexity
2. Dynamic
3. Multi-faceted
4. Far-reaching impact
Environmental Analysis
 External Environment
 Internal Environment
Environmental Analysis
 Economic Environment
 International Environment
 Political Environment
 Regulatory Environment
 Socio-cultural Environment
 Supplier Environment
 Technological Environment
Internal Environmental Analysis
 Organizational Resources +
Organizational Behavior Strength and
Weaknesses Synergetic Effects
Competencies Organizational
Capabilities Strategic Advantage
Internal Environmental Analysis
 Organizational Resources:
I] Tangible and intangible
II] Physical, human and organizational resources
III] Characteristics: Valuable
Rare
Costly to imitate
Non substitutable
Internal Environmental Analysis
 Organizational Behavior: Manifestation of
the various forces and influences
operating in the internal environment of an
organization that creates the ability for, or
place constraints on the usage of
resources
Internal Environmental Analysis
 Strengths and Weaknesses
 Synergistic Effects
 Competencies: Special qualities
possessed by an organization that makes
them withstand the pressure of
competition in the market place.
Internal Environmental Analysis
 Organizational Capability: It is the inherent
capacity or potential of an organization to
use its strengths and overcome its
weaknesses in order to exploit the
opportunities and fact the threats in the
external environment.
Organizational Capability
 Financial capability
 Marketing capability
 Personnel capability
 Operations capability
 General Management capability
Implementation of Strategies
 Nature of Strategy Implementation:
 Action oriented
 Comprehensive nature
 Integrated process
Implementation of strategies
 Barriers in implementation
 Managing Change
 Ambiguous strategies
 Lack of guidelines on implementation
 Unclear responsibility and accountability
 Working against the organization’s power
structure
Implementation of strategies
 Forward linkages
 Backward linkages
 Mintzberg’s Model
Implementation of strategies
 Strategy
 Plans
 Programs
 Projects
 Budgets
 Policies, procedures, rules and regulations
Case Study: Madhya Pradesh Society for Rural
Livelihood Promotion

 Implementing the Madhya Pradesh Rural

Livelihood Project
 2004-07: Target of 822 villages
 2007-12: Target of 3000 villages
 Strategy: Strengthening resource base
: Fostering micro – enterprise that
provide employment and income opportunities
Case Study
 Designing organization structure
 Funding of the project
 Implementation
 Transparency
 Results
Implementation of strategies
 Structural implementation
 Behavioral implementation
 Functional and Operational
implementation
 Procedural implementation
Evaluation of Strategies – Value
Creation
 Value: What does it mean?
 Shareholder Value

 Stakeholder Value

 Value Parameters

 Financial

 Non-Financial