BUSINESS POLICY AND

STRATEGY

Business Policy and Strategy-UCP

 KEY TERMS

• Intro to Course
• Policy
• Strategy
• Business Model
• Competitive Advantage
• Environmental Scanning
• Overview of Public and Private Sector
Strategies and Policies

Business Policy and Strategy-UCP

 THE NATURE OF STRATEGIC
MANAGEMENT

• A global perspective is a matter of

survival for businesses.
• E-commerce is a vital strategic
management tool.
• The natural environment is an important
strategic issue.

Business Policy and Strategy-UCP

 STRATEGIC MANAGEMENT ACHIEVES
ORGANIZATIONAL SUCCESS

Process of Integrating:
– management
– marketing
– finance/accounting
– production/operations
– research and development
– computer information systems
Business Policy and Strategy-UCP
Impact of Innovation and Sustainability

Innovation
describes new products, services, methods and
organizational approaches that allow the business to
achieve extraordinary returns
Sustainability
refers to the use of business practices to manage
the triple bottom line
1. the management of traditional profit/loss;
2. the management of the company’s social
responsibility; and
3. the management of its environmental responsibility.

Business Policy and Strategy-UCP

 THREE-STAGE PROCESS

Strategy Formulation

Strategy Implementation

Strategy Evaluation
Business Policy and Strategy-UCP
 Strategy

Business Policy and Strategy-UCP

3 TYPES OF STRATEGY
Stability

Corporate Strategy Growth

Retrenchment

Competitive
Business Strategy
Cooperative

Technological
Leadership
Functional
Strategy
Technological
Followership
Business Policy and Strategy-UCP
 Strategic Decision Making

STRATEGIC DECISIONS

–Rare: Strategic decisions are unusual and typically have no

precedent to follow.

–Consequential: Strategic decisions commit substantial resources and

demand a great deal of commitment from people at all levels.

–Directive: Strategic decisions set precedents for lesser decisions and

future actions throughout an organization.
 Strategic Decision Making

MINTZBERG’S MODES OF STRATEGIC

DECISION MAKING

–Entrepreneurial mode
Amazon.com
–Adaptive mode
Britannica Inc.
–Planning mode
IBM, CEO Lious
Gernster,
–Logical incrementalism

Business Policy and Strategy-UCP

 Hambrick and Fredrickson – Good Strategy

5 ELEMENTS OF GOOD STRATEGY

Arenas: Where will we be active? Corporate Strategy.

Vehicles: How will we get there?
Differentiators: How will we win in the marketplace? Business Strategy.

Staging: What will be our speed and sequence of Functional

moves?
Economic logic: How will we obtain our returns? Evaluation & Control

Business Policy and Strategy-UCP

 STRATEGY FORMULATION

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
Business Policy and Strategy-UCP
STRATEGY
IMPLEMENTATION

Annual Objectives

Policies

Employee Motivation

Resource Allocation

Business Policy and Strategy-UCP

 STRATEGY IMPLEMENTATION

Action Stage of strategic management:

– Most difficult stage
– Mobilizing employees and managers
– Interpersonal skills are critical
– Consensus on pursuing goals

Business Policy and Strategy-UCP

Business Policy and Strategy-UCP
STRATEGY
EVALUATION

Business Policy and Strategy-UCP

 STRATEGY EVALUATION

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

Business Policy and Strategy-UCP