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BUSINESS POLICY AND STRATEGIC
TAN WAH TIONG
CHONG KAR YUN
Page 1 of 24
NO DETAIL PAGE
1.0 Content 1
2.0 Introduction 2
3.0 Mission Statement of companies 3-6
4.0 Circumstances of the company to improve the performance 7-10
Five forces analysis, Mc Kinney‘s 7-s framework and key success factor
6.0 Best manager & worst manager 16-17
7.0 References 18
8.0 Coursework 19-23
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Strategic management involves the formulation and implementation of the major goals and
initiatives taken by a company's top management on behalf of owners, based on
consideration of resources and an assessment of the internal and external environments in
which the organization competes.
Strategic management provides overall direction to the enterprise and involves specifying
the organization's objectives, developing policies and plans designed to achieve these
objectives, and then allocating resources to implement the plans. Academics and practicing
managers have developed numerous models and frameworks to assist in strategic decision
making in the context of complex environments and competitive dynamics. Strategic
management is not static in nature; the models often include a feedback loop to monitor
execution and inform the next round of planning.
Harvard Professor Michael Porter identifies three principles underlying strategy: creating a
"unique and valuable [market] position", making trade-offs by choosing "what not to do",
and creating "fit" by aligning company activities to with one another to support the chosen
strategy. Dr. Vladimir Kvint defines strategy as "a system of finding, formulating, and
developing a doctrine that will ensure long-term success if followed faithfully."
Corporate strategy involves answering a key question from a portfolio perspective: "What
business should we be in?" Business strategy involves answering the question: "How shall
we compete in this business?" In management theory and practice, a further distinction is
often made between strategic management and operational management. Operational
management is concerned primarily with improving efficiency and controlling costs within
the boundaries set by the organization's strategy.
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3.0 Mission Statement of companies
Mission of Starbucks
Our mission is to inspire and nurture the human spirit – one person, one cup and one
neighborhood at a time. Here are the principles of how we live that every day.
Our Coffee has always been, and will always be, about quality. We‘re passionate about
ethically sourcing the finest coffee beans, roasting them with great care, and improving the
lives of people who grow them. We care deeply about all of this; our work is never done.
We‘re called partners, because it‘s not just a job, it‘s our passion. Together, we embrace
diversity to create a place where each of us can be ourselves. We always treat each other
with respect and dignity. And we hold each other to that standard.
For Our Customers. When we are fully engaged, we connect with, laugh with, and uplift the
lives of our customers – even if just for a few moments. Sure, it starts with the promise of a
perfectly made beverage, but our work goes far beyond that. It‘s really about human
For Our Stores. When our customers feel this sense of belonging, our stores become a haven,
a break from the worries outside, a place where you can meet with friends. It‘s about
enjoyment at the speed of life – sometimes slow and savored, sometimes faster. Always full
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For Our Neighborhood. Every store is part of a community, and we take our responsibility to
be good neighbors seriously. We want to be invited in wherever we do business. We can be a
force for positive action bringing together our partners, customers, and the community to
contribute every day. Now we see that our responsibility and our potential for good is even
larger. The world is looking to Starbucks to set the new standard, yet again. We will lead.
For Our Shareholders. We know that as we deliver in each of these areas, we enjoy the kind
of success that rewards our shareholders. We are fully accountable to get each of these
elements right so that Starbucks and everyone it touches can endure and thrive.
Mission of Google
Our mission is focus on the user and all else will follow. - Since the beginning, we‘ve
focused on providing the best user experience possible. It‘s best to do one thing really, really
well. Besides, fast is better than slow. We know your time is valuable, so when you‘re
seeking an answer on the web you want it right away–and we aim to please.
In addition, we provide democracy on the web works. Google search works because it relies
on the millions of individuals posting links on websites to help determine which other sites
offer content of value. Next, you don‘t need to be at your desk to need an answer. - The
world is increasingly mobile: people want access to information wherever they are,
whenever they need it and it can make money without doing evil.
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Furthermore, there‘s always more information out there. Once we‘d indexed more of the
HTML pages on the Internet than any other search service, our engineers turned their
attention to information that was not as readily accessible.
Moreover, the need for information crosses all borders. - Our company was founded in
California, but our mission is to facilitate access to information for the entire world, and in
every language. Lastly, you can be serious without a suit. Our founders built Google around
the idea that work should be challenging, and the challenge should be fun.
Mission of Nike
The mission statement of Nike is to bring inspiration and innovation to every athlete* in the
world. ‗If you have a body, you are an athlete.‘
In addition to its corporate mission statement, Nike has guiding principles which it refers to
as its ―11 Maxims‖ which guide employees at all levels as they complete their work at Nike
and represent the Nike corporation globally. The 11 Maxims which describe and shape the
Nike culture are: "It is our nature to innovate. Nike is a company and a brand, Simplify and
go. The consumer decides. Be a sponge. Evolve immediately. Do the right thing. Master the
fundamentals. We are on the offense – always. Remember the man. (The late Bill Bowerman,
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The best mission statement is the Starbuck‘s mission. This is because it is not just care for
the customer neither nor partners, stores, neighborhood and shareholders also be care. The
mission is all-rounded compare to other two company. Furthermore, the coffee is sourcing
from the finest coffee beans and roasting them with great care. This incident prove that it is
the coffee not just care about the physical, the substantial and the quality also very care. That
prove the company is a very responsibility and high self-requirement company. ‗The
promise of a perfectly made beverage, but our work goes far beyond that. It‘s really about
human connection.‘ This sentences make proof that Starbuck not just insist on quality, the
efficiency of the company also very care. In the conclusion, the Starbuck is the best
company that I chose because it is responsible, efficiency and high self-requirement.
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4.0 Circumstances of the company to improve the
Strategies to Improve Sales
There are three alternatives to improve the sales performance of a business unit, to fill the
gap between actual sales and targeted saleswhich is intensive growth, integrative growth and
Intensive Growth refers to the process of identifying opportunities to achieve further growth
within the company‘s current businesses. To achieve intensive growth, the management
should first evaluate the available opportunities to improve the performance of its existing
current businesses.It may find three options. To penetrate into existing markets· To develop
new markets· To develop new products At times, it may be possible to gain more
market share with the current products in their current markets through a market penetration
strategy. For instance, SONY introduced TV sets with Trinitron picture tubes into the market
in 1996 priced at a premium of Rs.10, 000 and above over the market through a niche market
They gradually lowered the prices to market levels. However, it also simultaneously
launched higher-end products (high-technology products) to maintain its global image as a
technology leader. By lowering the prices of TVs with Trinitron picture tubes, the company
could successfully penetrate into the markets to add newcustomers to its customer base.
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Besides, Market Development Strategy is to explore the possibility to find or develop new
markets for its current products (from the northern region to the eastern region etc.). Most
multinational companies have been entering Indian markets with this strategy, to develop
markets globally. However, care should be taken to ensure that these new markets are
not low density or saturated markets, which could lead to price pressures.
In addition, Product Development Strategy involves consideration of new products of
potential interest to its current markets. Moreover, Diversification strategy is study the
following example to understand what Product Development Strategy is. Next,
MICROSOFT‘s New Strategy is called PC-plus. It has three elements) Providing computer
power to the most commonly used devices such as cell phone, personal computer, toaster
oven, dishwasher, refrigerator, washing machines and so on developing software to allow
these devices to communicate. Besides, Investing heavily to help build wireless and high-
speed internet access throughout the world to link it all together. Microsoft envisions a home
where everyday appliances and electronics are smart. According to
Bill Gates, ‗In the near future, PC-based networks will help us control many of our domestic
matters with devices that cost no more than $ 100 each ‗.It is also said at Microsoft that
VCRs can be programmed via e-mail, laundry washers can bedesigned to send an instant
message to the home computer when the load is done andrefrigerators can be made to send
an e-mail when there‘s no more milk. Microsoft plans to givethese appliances ‗brains‗and
provide them the means to talk to each other through theirWindows CE Operating System.b)
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Furthermore, Integrative Growth refers to the process of identifying opportunities to develop
or acquire businesses that are related to the company‘s current businesses. More often, the
business processes have to be integrated for linear growth in the profits. The corporate plan
may be designed to undertake backward, forward or horizontal integration within the
industry. If a company operating in music systems takes over the manufacturing business of
its plastic material supplier, it would be able to gain more control over the market or
generate more profit. (Backward Integration)
Alternatively, if this company acquires some of it most profitably operating intermediaries
such as wholesalers or retailers, it is forward integration. If the company legally takes over
or acquires the business of any of its leading competitors, it is called horizontal integration
(however, if this competitor is weak, it might be counter-productive due to dilution of
In addition, diversification growth refers to the process of identifying opportunities to
develop or acquire businesses that are not related to the company‘s current businesses. This
makes sense when such opportunities outside the present businesses are identified with
attractive returns and that industry has business strengths to be successful. In most cases, this
is planned with new products that have technological or marketing synergies with existing
businesses to cater to a different group of customers
Concentric Diversification is a printing press might shift over to offset printing with
computerized content generation to appeal to higher-end customers and also add
new application areas
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Horizontal Diversification sells stationery. Alternatively, the company might choose new
businesses that have nothing to do with the current technology, products or markets. Next is
Conglomerate Diversification. The classical examples for this would be engineering and
textile firms setting up software development centers or Call Centers with new service
Lastly, Situation Analysis Sales Improvement Strategies is a supplier of computer stationery
invests in a computer stationery manufacturing unit. A vendor supplying engine boxes
to Maruti decides to supply the same with modifications to Hyundai. Company dealing
in computer floppies plans to set up a Software Technology Park.
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5.0 Five forces analysis, Mc Kinney’s 7-s framework and
key success factor approach
Five forces analysis, Mc Kinney’s 7-s framework
―McKinsey 7s model is a tool that analyzes firm‘s organizational design by looking at 7 key
internal elements: strategy, structure, systems, shared values, style, staff and skills, in order
Below you can find the McKinsey model, which represents the connections between seven
areas and divides them into ‗Soft Ss‘ and ‗Hard Ss‘. The shape of the model emphasizes
interconnectedness of the elements.
The model can be applied to many situations and is a valuable tool when organizational
design is at question. The most common uses of the framework are:
To facilitate organizational change.
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To help implement new strategy.
To identify how each area may change in a future.
To facilitate the merger of organizations.
In McKinsey model, the seven areas of organization are divided into the ‗soft‘ and ‗hard‘
areas. Strategy, structure and systems are hard elements that are much easier to identify and
manage when compared to soft elements. On the other hand, soft areas, although harder to
manage, are the foundation of the organization and are more likely to create the sustained
Hard Ss Soft Ss
Firstly, Strategy is a plan developed by a firm to achieve sustained competitive advantage
and successfully compete in the market. What does a well-aligned strategy mean in 7s
McKinsey model? In general, a sound strategy is the one that‘s clearly articulated, is long-
term, helps to achieve competitive advantage and is reinforced by strong vision, mission and
values. But it‘s hard to tell if such strategy is well-aligned with other elements when
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analyzed alone. So the key in 7s model is not to look at your company to find the great
strategy, structure, systems and etc. but to look if its aligned with other elements. For
example, short-term strategy is usually a poor choice for a company but if its aligned with
other 6 elements, then it may provide strong results.
Secondly, Structure represents the way business divisions and units are organized and
includes the information of who is accountable to whom. In other words, structure is the
organizational chart of the firm. It is also one of the most visible and easy to change
elements of the framework.
In addition, Systems are the processes and procedures of the company, which reveal business‘
daily activities and how decisions are made. Systems are the area of the firm that determines
how business is done and it should be the main focus for managers during organizational
Besides, Skills are the abilities that firm‘s employees perform very well. They also include
capabilities and competences. During organizational change, the question often arises of
what skills the company will really need to reinforce its new strategy or new structure.
In addition, Staff element is concerned with what type and how many employees an
organization will need and how they will be recruited, trained, motivated and rewarded.
Moreover, Style represents the way the company is managed by top-level managers, how
they interact, what actions do they take and their symbolic value. In other words, it is the
management style of company‘s leaders.
Lastly, Shared Values are at the core of McKinsey 7s model. They are the norms and
standards that guide employee behavior and company actions and thus, are the foundation of
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As we pointed out earlier, the McKinsey 7s framework is often used when organizational
design and effectiveness are at question. It is easy to understand the model but much harder
to apply it for your organization due to a common misunderstanding of what should a well-
aligned elements be like. There is a useful paper from excellencegateway.org.uk, which
provides examples showing how effective and ineffective elements look like. Yet, separate
elements that are effective on their own do not necessarily lead to optimal organizational
The steps that should help you to apply this tool. Firstly, Identify the areas that are not
effectively aligned. During the first step, your aim is to look at McKinsey 7s and identify if
they are effectively aligned with each other. Normally, you should already be aware of how
7 elements are aligned in your company, but if you don‘t you can use the checklist
from WhittBlog to do that. After you‘ve answered the questions outlined there you should
look for the gaps, inconsistencies and weaknesses between the relationships of the elements.
For example, you designed the strategy that relies on quick product introduction but the
matrix structure with conflicting relationships hinders that so there‘s a conflict that requires
the change in strategy or structure.
Secondly, determine the optimal organization design. With the help from top management,
your second step is to find out what effective organizational design you want to achieve. By
knowing the desired alignment you can set your goals and make the action plans much easier.
This step is not as straightforward as identifying how seven areas are currently aligned in
your organization for a few reasons. First, you need to find the best optimal alignment,
which is not known to you at the moment, so it requires more than answering the questions
or collecting data. Second, there are no templates or predetermined organizational designs
that you could use and you‘ll have to do a lot of research or benchmarking to find out how
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other similar organizations coped with organizational change or what organizational designs
they are using.
In addition, decide where and what changes should be made. This is basically your action
plan, which will detail the areas you want to realign and how would you like to do that. If
you find that your firm‘s structure and management style are not aligned with company‘s
values, you should decide how to reorganize the reporting relationships and which top
managers should the company let go or how to influence them to change their management
style so the company could work more effectively.
Besides, make the necessary changes. The implementation is the most important stage in any
process, change or analysis and only the well-implemented changes have positive effects.
Therefore, you should find the people in your company or hire consultants that are the best
suited to implement the changes.
Lastly, continuously review the 7s. The seven elements: strategy, structure, systems, skills,
staff, style and values are dynamic and change constantly. A change in one element always
has effects on the others and new organizational design is required. Thus, continuous review
of each area is very important.
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6.0 Best manager & worst manager
1. 5 I respect him/her personally, and want to act in a way that merits his/her
respect and admiration. 1
2. 5 I respect her/his competence about things she/he is more experienced about
than I. 1
3. 5 He/she can give special help to those who cooperate with him/her. 1
4. 5 He/she can apply pressure on those who cooperate with him/her. 1
5. 5 He/she has a legitimate right, considering his/her position, to expert that
his/her suggestions will be carried out. 1
6. 3 I defer to his/her judgment in areas with which he/she is more familiar than I.
7. 1 He/she can make things difficult for me if I fail to follow his/her advice.
8 3 . Because of his/her job title and rank, I am obligated to follow his/her
9. 4 I can personally benefit by cooperating with him/her. 1
10. 5 Following his/her advice results in better decisions. 1
11. 5 I cooperate with him/her because I have high regard for him/her as an
12. 5 He/she can penalize those who do not follow his/her suggestions. 1
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13. 5 I fed I have to cooperate with him/her. 1
14. 5 I cooperate with him/her because I wish to be identified with him/her.
15. 5 Cooperating with him/her can positively affect my performance. 1
Reward Coercive Legitimate Referent Expert
3. 5 4. 5 5. 5 1. 5 2. 5
9. 4 7. 1 8. 3 11. 5 6. 3
15. 5 12. 5 13. 5 14. 5 10. 5
Total: 14 Total: 11 Total: 13 Total: 15 Total: 13
Reward Coercive Legitimate Referent Expert
3. 1 4. 1 5. 1 1. 1 2. 1
9. 1 7. 5 8. 3 11. 1 6. 4
15. 1 12. 1 13. 1 14. 1 10. 1
Total: 3 Total: 7 Total: 5 Total: 3 Total: 5
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(d) The marked that i give to best manager is 14 but for the worst just only 3 mark. The mark
of Coercive for the best manager is 14 but for worst manager just 7. Besides, the mark of
Legitimate for best manager is 13 but for the worst manager just 5. In addition, the mark of
Referent for best manager is 15 but for the worst manager is 3. Lastly, the mark of Expert for
the best manager is 13 but for the worst manager just 5.
As a conclusion, the best manager is a person who very care about the reward of employee,
coercive, legitimate (rational), referent and professional ( expert). Vice versus to the worst
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TAN WAH TIONG
CHONG KAR YUN
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1. PHASES OF STRATEGIC MANAGEMENT
Many of the concepts and techniques that deal with strategic management have been
developed and used successfully by business corporations such as General Electric and
the Boston Consulting Group. Over time, business practitioners and academic researchers
have expanded and refined these concepts. Initially, strategic management was of most
use to large corporations operating in multiple industries. Increasing risks of error, costly
mistakes, and even economic ruin are causing today's professional managers in all
organizations to take strategic management seriously in order to keep their companies
competitive in an increasingly volatile environment.
As managers attempt to better deal with their changing world, a firm generally evolves
through the following four phases of strategic management:
Phase 1— Basic financial planning: Managers initiate serious planning when they are
requested to propose the following year's budget. Projects are proposed on the basis
of very little analysis, with most information coming from within the firm. I he sales
force usually provides the small amount of environmental information. Such
simplistic operational planning only pretends to be strategic management, yet it is
quite time consuming. Normal company activities are often suspended for weeks
while managers try to cram ideas into the proposed budget. The time horizon is
usually one year.
Phase 2— Forecast-based planning: As annual budgets become less useful at
stimulating long-term planning, managers attempt to propose five-year plans. At this
point they consider projects that may take more than one year. In addition to internal
information, managers gather any available environmental data—usually on an ad
hoc basis—and extrapolate current trends five years into the future. This phase is
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also time consuming, often involving a full month of managerial activity to make
sure all the proposed budgets fit together. The process gets very political as
managers compete for larger shares of funds. Endless meetings take place to
evaluate proposals and justify assumptions. The time horizon is usually three to five
Phase 3— External oriented (strategic) planning: frustrated with highly political yet
ineffectual five-year plans, top management takes control of the planning process be
initiating strategic planning. The company seeks to increase its responsiveness to
changing markets and competition by thinking strategically. Planning is taken out of
the hands of lower-level managers and concentrated in a planning staff whose task is to
develop strategic plans for the corporation. Consultants often provide the
sophisticated and innovative techniques that the planning staff uses to gather
information and forecast future trends. Ex-military experts develop competitive
intelligence units. Upper-level managers meet once a year at a resort "retreat" led by
key members of the planning staff to evaluate and update the current strategic plan.
Such top-down planning emphasizes formal strategy formulation and leaves the
implementation issues to lower management levels. Top management typically
develops five-year plans with help from consultants but minimal input from lower
Phase 4—Strategic management: Realizing that even the best strategic plans are
worthless without the input and commitment of lower-level managers, top
management forms planning groups of managers and key employees at many levels,
from various departments and workgroups. They develop and integrate a series of
strategic plans aimed at achieving the company's primary objectives. Strategic plans
at this point detail the implementation, evaluation, and control issues. Rather than
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attempting to perfectly forecast the future, the plans emphasize probable scenarios
and contingency strategies. The sophisticated annual five-year strategic plan is
replaced with strategic thinking at all levels of the organization throughout the year.
Strategic information, previously available only centrally to top management, is
available via local area networks and intranets to people throughout the organization.
Instead of a large centralized planning staff, internal and external planning
consultants are available to help guide group strategy discussions. Although top
management may still initiate the strategic planning process, the resulting strategic
may come from anywhere in the organization. Planning is typically interactive
across levels and is no longer top down. People at all levels are now involved.
General Electric, one of the pioneers of strategic planning, led the transition from strategic
planning to strategic management during the 1980s. By the 1990s, most other corporations
around the world had also begun the conversion to strategic management.
2. Moral Relativism
Some people justify their seemingly unethical positions by arguing that there is no one
absolute code of ethics and that morality is relative. Simply put moral relativism claims that
morality is relative to some personal, social, or cultural standard and that there is no method
for deciding whether one decision is better than another. At one time or another, most
managers have probably used one of the four types of moral relativism—naive, role, social
group, or cultural—to justify questionable behavior.
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Nave relativism: Based on the belief that all moral decisions are deeply personal and that
individuals have the right to run their own lives, adherents of moral relativism argue that
each person should be allowed to interpret situations and act on his or her own moral values.
This is not so much a belief as it is an excuse for not having a belief or is a common excuse
for not taking action when observing others lying or cheating.
Role relativism: Based on the belief that social roles carry with them certain obligations to
that role, adherents of role relativism argue that a manager in charge of a work unit must put
aside his or her personal beliefs and do instead what the role requires, that is, act in the best
interests of the unit. Blindly following orders was a common excuse provided by Nazi war
criminals after World War II.
Social group relativism: Based on a belief that morality is simply a matter of following the
norms of an individual's peer group, social group relativism argues that a decision is
considered legitimate if it is common practice, regardless of other considerations
("everyone's doing it"). A real danger in embracing this view is that the person may
incorrectly believe that a certain action is commonly acccpted practice in an industry when it
Cultural relativism: Based on the belief that morality is relative to a particular culture,
society, or community, adherents of cultural relativism argue that people should understand
the practices of other societies, but not judge them. This view not only suggests that one
should not criticize another culture's norms and customs, but also that it is acceptable to
personally follow these norms and customs ("When in Rome, do as the Romans do.").
Although these arguments make some sense, moral relativism could enable a person to
justify almost any sort of decision or action, so long as it is not declared illegal.
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