Business policy Business policy and Strategic and Strategic managementmanagement

3rd Semester3rd SemesterMBAMBA

IntroductionIntroduction Why Business policy & strategic Why Business policy & strategic

management?management?

It lends a Methodology and frameworkIt lends a Methodology and framework Provide route map to a firmProvide route map to a firm Ensure speedy decision & directionEnsure speedy decision & direction Hedge against uncertaintyHedge against uncertainty To understand the external trends in To understand the external trends in

advanceadvance To Ensure the best utilization of resourcesTo Ensure the best utilization of resources

What is Strategy?What is Strategy?

A well thought out systematic plan of A well thought out systematic plan of

action action to defendto defend and and to defeatto defeat competitors.competitors.

Emergent Strategy ?Emergent Strategy ?

Level of strategy Level of strategy

Corporate Corporate BusinessBusiness FunctionalFunctional

Corporate

Business1 Business 2 Business3

F1 F2 F3 F4

Strategic management (SM)Strategic management (SM)

Originated in 1950’s and again Originated in 1950’s and again revived after 1990’s.revived after 1990’s.

S.M is defined as S.M is defined as the art and sciencethe art and science of of formulationformulation, , implementingimplementing and and

evaluatingevaluating cross-functional cross-functional decisionsdecisions that enable an that enable an organization to achieve its objective. organization to achieve its objective.

Key terms in Strategic Key terms in Strategic managementmanagement

Competitive advantage & Core Competitive advantage & Core competencycompetency

Vision & Mission statementVision & Mission statement External opportunities and threatsExternal opportunities and threats Internal strength and weaknessesInternal strength and weaknesses Long term objectivesLong term objectives Annual Objectives Annual Objectives StrategiesStrategies StrategistsStrategists PoliciesPolicies

Advantages of Strategic Advantages of Strategic management management

• Allows for identification, Prioritization and Allows for identification, Prioritization and Exploration of opportunities.Exploration of opportunities.

• Provide an objective view of management Provide an objective view of management problemsproblems

• Minimize the effect of adverse conditionMinimize the effect of adverse condition• Allow effective allocation of resourcesAllow effective allocation of resources• Encourages forward thinkingEncourages forward thinking• Gives degree of discipline and formality to Gives degree of discipline and formality to

the management of a business.the management of a business.• Framework for internal communication.Framework for internal communication.

Stages of strategic managementStages of strategic management

FormulationFormulation ImplementationImplementation EvaluationEvaluation