BUSINESS POLICY

AND

STRATEGIC

MANAGEMENT

B. HIRIYAPPA, PHD.

Assistant Professor

Government First Grade

College

Thirthahalli(Bangalore)

PREFACE

Strategic management is a stream of decisions and actions with view to

develop effective long term and short term planning and policies with

technological business forecasting that would help the organization

achieve its superior goal. Strategic management includes strategic

analysis, strategy formulation strategic choice, and strategy

implementation and control strategic decisions for an organization

might to be to deploy resources into new opportunities.

In writing this book I have drawn on a vast amount of literature in

strategic management. Naturally, I owe an intellectual debt to numerous

authors who have enriched the stream of literature in strategic

management by their contributions. My prefounded debt is to American

scholars to George Stenier, Ansoff, Newman, Warren, Peter Drucker,

Akcoff, Christenson, Kenneth, Bower and Vacil, Acherman, Robinson,

Piere, Wheeler and Hunger, Porter, Charles W.L.Hill and Gareth R.Jones.

In the UK I owe a great debt to Argeni, Hussey, and Barnard Taylor,

Thomson and other scholars

Bangalore

B.HIRIYAPPA. Ph. D.,

drbhiriyappa@gmail.com

CONTENTS OF THE BOOK

CHAPTER 1 DILEMMA OF BUSINESS � Dilemma of business 15

� Traditional Definition of business 17

� Motives of business 19

� Innovative Characteristics of business 20

� Branches of business 21

� Kinds of industry 21

� Creative Objectives of a business 22

� Long term objectives of a Firm 27

� Expert opinion of Business policy 28

� Need of business policy 30

� Different types of business policy 31

CHAPTER 2 BUSINESS STRATEGY AND CORPORATE

STRATEGY � Introduction 41

� Means and Ends of Business 42

� Dilemma of strategy and structure of Strategy 47

� Dilemma of corporate strategy 48

� Concept of strategy 48

� Characteristics of corporate strategy 50

CHAPTER 3 INTERNAL ENVIRONMENT ANALYSIS � Internal Environmental analysis 52

� Environment influence on SWOT 53

� Components of business environment 54

� Relationship between organization and its environment 55

� Internal analysis of the organization / company 57

� The value of systematic internal assessment 58

� Steps/process in the development of a organizational / company

profile 59

� Identification of strategic factors 59

� Functional approach 59

� The value chain approach 64

� Primary activities 64

� Identifying support activities 65

� Using value chain in internal analysis 68

� Evolution of strategic internal factors 68

� Stages in product / market evolution or product life cycle 69

� Quantitative versus qualitative approaches in evaluating internal

factors of the organization 70

CHAPTER 4 MICRO AND MACRO ENVIRONMENT ANALYSIS � Introduction 72

� Environmental scanning 73

� Micro / operating environment 73

� Suppliers 75

� Customers 75

� Competitors 76

� Marketing intermediaries 77

� Publics 77

� Organization 77

� Market 78

� Macro / remote environment 79

� Economic environment 80

� Political - legal environment 82

� Socio –cultural environment 84

� Demographic environment 85

� Natural environment 88

� Technological environment 89

� Global environment 92

� Why do companies go global? 95

� Strategic response to the environment 100

� Competitive environment 101

CHAPTER 5 FRAMEWORK AND SCOPE OF STRATEGIC

MANAGEMENT � Introduction 105

� Meaning of strategic management 105

� Framework of strategic management 107

� Importance of strategic management 108

� Characteristic/nature of strategic planning 109

� Scope of strategic management 110

� Dimensions of strategic decisions 112

� Tasks in strategic management 114

� Strategic management model 115

� Levels at which strategy operates / strategic 117

� Levels in organization 117

� Role of mangers at various levels 117

� Corporate level 118

� Business level 119

� Functional level 119

� Characteristic of strategic management decisions at different levels

119

� Benefits of strategic management 121

� Risks of strategic management 122

� Strategic management process / steps 122

� Components of strategic management 123

� Tasks in strategic management 129

CHAPTER 6 DEVELOPMENT OF VISION AND MISSION � Introduction 130

� Some fundamental questions related to related to mission & vision

130

� The vision 130

� Elements of a strategy vision 132

� Development of strategic vision 133

� Mission 133

� The need for explicit mission of organization 134

� Fundamental elements of mission 135

� Components of mission statement 135

� What is our mission? And what business are we in? 136

� Defining organization mission 136

CHAPTER 7 NATURE AND SCOPE OF CORPORATE STRATEGY � Introduction 139

� Corporate strategy 139

� Nature, scope and concerns of corporate strategy 139

� The stages of corporate strategy formulation implementation process

144

� A need for long term and short term objectives 148

� Qualities of long term objectives 150

CHAPTER 8 FRAMEWORK OF STRATEGIC ANALYSIS

� Introduction 159

� Strategic analysis 159

� Issues to consider for strategic analyses 161

� Situational analysis 163

� Framework of strategic analysis 167

� The methods of industry and competitive analysis 168

� The concept of strategic groups 173

� Swot analysis 178

� Significance of swot analysis 180

CHAPTER 9 GENERIC STRATEGIES � Introduction 185

� Strategic alternatives 185

� Michael porter’s generic strategies 185

� Cost leadership strategies 187

� Advantages of cost leadership strategy 188

� Strategic choices 188

� Disadvantages of cost leadership strategy 189

� Advantages of differentiation strategy 190

� Disadvantages of differentiation strategy 191

� Focus strategy 192

� Advantages of focus strategy 193

� Disadvantages of focus strategy 193

� Strategic choices of focus strategy 194

� Generic strategies comparative skills and resource requirement 194

� Best cost provider strategy 196

� Distinctive features of the generic competitive strategies 197

CHAPTER 10 FORMULATION OF FUNCTIONAL

DEPARTMENTAL STRATEGY

� Introduction 200

� Reasons for functional strategies are needed to firms 201

� Marketing strategy formulation 202

� Developing the marketing mix 205

� Marketing strategy techniques 210

� Financial strategy formulation 214

� Production strategy formulation 222

� Research and development strategies 225

� Human resource strategies formulation 229

CHAPTER 11 GRAND STRATEGIES STRUCTURES IN

ENTERPRISES

� Grand strategies / directional strategies 239

� Features of grand strategies 241

� Characteristics and scope of various grand strategies 242

� Stability strategy 242

� Characteristics of stability strategy 242

� Expansion strategy 243

� Characteristics of expansion strategy 243

� Retrenchment/ divestment strategy 246

� Characteristics of retrenchment/ divestment strategy 246

� Combination strategy 246

� Major reasons for organizations adopting different grand strategies

247

CHAPTER 12 DIVERSIFICATION STRATEGIES FOR

ENTERPRISES � Introduction 250

� Diversification 250

� Types of diversification 250

� Related diversification 251

� Unrelated diversification 251

� Internal diversification 252

� External diversification 252

� Horizontal diversification 252

� Vertical diversification 252

� Active diversification 252

� Passive diversification 252

� Concentric diversification 256

� Conglomerate diversification 257

CHAPTER 13 TURNAROUND, RETRENCHMENT DIVESTMENT,

AND LIQUIDATION STRATEGIES FOR ENTERPRISES � Introduction 260

� Turnaround strategy 260

� The causes of corporate decline 261

� Main elements of successful turnaround strategies 264

� Issues for successful turnaround strategies 266

� Contribution elements for turnaround in firm’s 266

� Divestment/cutback strategy 267

� Reasons to adopt divestment strategy in firms 267

� Liquidation strategies 268

� Liquidation – the strategy of last resort 268

� End game strategies 269

CHAPTER 14 TOWS MATRIX ANALYSIS, BCG MATRIX,

ANSOFF’S MATRIX, ADL MATRIX, THE GENERAL ELECTRIC

MODEL

� Introduction 270

� Tows matrix 270

� Portfolio analysis 271

� Advantage of portfolio analysis 272

� Strategic business units 272

� Characteristics of SBUs 273

� Advantages of SBUs organizational structure 273

� Disadvantages of strategic business unit organizational 273

� Stages in product / market evolution or product life cycle 274

� Advantage of product life cycle 275

� BCG matrix 276

� Mission of BCG 276

� Available strategies to pursue 278

� Limitations of the BCG matrix 279

� ANSOFF’s product - market growth matrix 280

� ADL matrix 283

� The general electric model 285

CHAPTER 15 PORTER’S FIVE FORCES MODEL AND

MCKINSEY’S 7’S FRAMEWORK

� Introduction 287

� Competitive advantage 287

� Five force model 287

� Potential competitors 289

� Rivalry among established companies 290

� The bargaining power of suppliers 293

� The bargaining power of buyers 293

� The threat of substitute products 294

� Mckinsey’s 7’s framework 295

CHAPTER 16 VALUE CHAIN CONCEPT ANALYSIS � Introduction 298

� The value chain 298

� Basic concepts of value chain 298

� The value creation process 299

� Primary activities 300

� Supporting activities 300

� Achieving superior efficiency 305

� Economies of scale 305

� Flexible manufacturing efficiency 306

� Materials management efficiency 306

� R&D strategy and efficiency 307

� Human resource strategy and efficiency 307

� Infrastructure and efficiency 307

� Superior quality 308

� The TQM concept 308

� Implementing TQM 309

� Superior innovation 310

� Building competitive steps in innovation - customer responsiveness

311

CHAPTER 17 VERTICAL INTEGRATION AND STRATEGIC

ALLIANCES � Introduction 316

� Vertical integration 316

� Upstream/backward integration 317

� Downstream/forward integration 317

� Creating value through vertical integration 318

� Disadvantages of vertical integration 320

� Strategic alliances 321

� Short term contracts and competitive bidding 321

� Building long term 322

CHAPTER 18 ACQUISITIONS AND JOINT VENTURES

� Introduction 324

� Acquisitions and versus internal new venture as entry strategy 324

� Failure of acquisitions 326

� Guidelines for successful acquisition 327

� Advantages of acquisition strategy 328

� Disadvantages of acquisition strategy 329

� Pitfalls of internal new venture 329

� Joint venture 331

� Advantages of joint venture strategy 332

� Disadvantages of joint venture strategy 332

� Life cycle of joint venture 333

� Joint venture as a entry strategy 336

� Drawback of joint ventures arrangements 336

CHAPTER 19 TAILORING STRATEGY ANALYSIS � Introduction 337

� Companies competing in emerging industries of the future 337

� Companies competing in turbulent, high velocity markets 340

� Companies competing in mature, slow growth industries 343

� Companies competing in stagnant or declining strategies 347

� Companies competing in fragmented industries 349

� Companies in competitively weak positions 352

CHAPTER 20 STRATEGY FOR FRAGMENTED INDUSTRIES � Introduction 358

� Strategy in fragmented industries 358

� Chaining 359

� Franchising 360

� Horizontal merger 360

� Strategy in embryonic and growth industries 360

� Strategy in mature industries 362

� Strategies to manage rivalry immature industries 365

� Price signaling 365

� Price leadership 366

� Non price competition 366

� Capacity control 367

� Focus causing excess capacity 368

� Choosing a capacity control strategy in mature industries 368

� Supply and distribution strategy in mature industries 369

� Strategy in declining industry 370

� Strategy selection in a declining industry 379

CHAPTER 21 STRATEGIC CHANGE MANAGEMENT

� Introduction 372

� Nature of strategic management change 372

� Organizational politics and power 375

� Source of organizational politics 375

� Power 377

� Source of power 377

� Organizational conflict 379

� Process of the organizational conflict 381

� Managing conflict strategically 382

� Conflict resolution strategies 383

� Implementing strategic change steps in change process 383

CHAPTER 22 STRATEGIES FOR COMPETING IN

GLOBLIZING MARKETS

� Introduction 386

� Globalization market 386

� Reasons for globalization 387

� Advantages of globalization 387

� Disadvantages of globalization 388

� Why companies expand into foreign markets 388

� The difference between competing internationally and competing

globally 389

� Cross country differences in cultural, demographic and market

conditions 390

� Multi-global /global country competition 391

� Strategy options for entering and competing in foreign markets 391

� Difference between multicountry strategy and global strategy 396

� Pursuing competitive advantage by competing globally 398

� Strategic alliance and joint venture with foreign country partners 400

� Competing in emerging foreign markets 401

� Strategies for local companies in emerging markets 401

CHAPTER 23 CORPORATE CULTURE AND LEADERSHIP

� Introduction 403

� Concept of corporate culture 403

� Corporate culture 404

� Contents of corporate culture 405

� Strength of corporate culture 406

� Strong culture companies 406

� Weak culture companies 407

� Unhealthy cultures 407

� Adaptive culture 408

� Thickness culture 408

� Extent of sharing 408

� Clarity of ordering culture 408

� Deciphering culture 409

� How culture influences 409

� Building ethics into the culture 410

� Strategic leadership 411

� The role of the CEO 413

� Key considerations in managerial assignment to implement strategy

413

� Managerial assignment situations 414

CHAPTER 24 STRATEGIC CONTROL SYSTEMS

� Introduction 416

� Establishing strategic controls 416

� Strategic control systems 416

� Characteristics of strategic control systems 416

� Steps/process in designing an effective control system 417

� Levels of control 418

� Types strategic control 418

� Premise 419

� Implementation 420

� Strategic surveillance 421

� Special alert control 421

� Market 421

� Output control 422

� Operational control systems 422

� Types of operational control systems 422

� Strategic reward systems 424

CHAPTER 25 MATCHING STRUCTURE AND CONTROL

ANALYSIS � Introduction 426

� Matching structure and control analysis at the functional level,

business level 426

� Global structure 430

� Multidomestic strategy and structure

� International strategy and structure 429

� Global organizational structure 430

� Matching structure control at corporate level 437

CHAPTER 26 STRATEGY IMPLEMENTATION AND CONTROL � Introduction 439

� Interrelationships between strategy formulation and implementation

439

� Basic elements in Strategic management 440

� Strategy formulation and implementation matrix 442

� Contrast between strategy formulation and implementation 445

� Issues in Strategy implementation 447

CHAPTER 27 BUSINESS PROCESS REENGINEERING AND

BENCHMARKING � BPR 453

� Different forms of Business Process 457

� Key elements in BPR 460

� Rationale BPR 461

� BPR approach 463

� Steps in BPR 463

� Problems of BPR 467

� Benchmarking 469

� Benchmarking Process 472

CHAPTER 28 SIX SIGMA AND MANAGEMENT � What is Six Sigma? 472

� Focus Areas in Six Sigma 475

� Six Sigma Méthodologies 476

� What’s New About Six Sigma 479

� Importance of six sigma in organization 480

� Six Sigma Act as a System of Management 481

CHAPTER 29 CONTEMPORARY STRATEGIC ISSUES � Introduction 486

� Strategies for internet economy 486

� What is internet technology? 487

� Strategy shaping characteristics of the e-commerce environment 488

� Strategic management in non profit and government organization 490

� Educational institutions 491

� Medical organizations 491

� Governmental agencies and departments 492

Index

CHAPTER 1

DILEMMA OF BUSINESS

DILEMMA OF BUSINESS

Traditional business concept generally involves the buying and selling of

products and services which offered to ultimate customers. This concepts is

not suitable due to changes, fluctuations, innovations, inventions of new

market, new customers, new product and services, we can redefining of the

business concepts. Business managers are well equipped with e technology

to sell their companies products and services. They need the self awareness

of the work and self confidence to manage, admin, control and monitor the

sales proceeds in a several regions and several business segments.

New dimensions of business concept will be looking into e technology in

business through the net work marketing, without products and services and

enterprise advertise to business with just website and get orders from across

the world. An order would be executed on the basis of demand and supply

and ultimately shipping to customers. Sales manager would not see the

customer in spite of a manager get orders through internet marketing tools.

We believed that only buying and selling of goods and services meanwhile it

is happen in real scenario, it is totally change compare to old business

concepts. New business concepts are the output of innovations of

communication tools like as internet facilities. E commerce and e-

innovation result helpful to world economic forum that ready to contribution

to business and industry.

Globalization, liberalization and privatization are the major tools to business

growth, development, survival of the major multinational companies.

Multinational companies produce the goods and services in an economy of

scale, and get orders from across the world, in this way to take competitive

advantage; it is also one of the business strategies to enhance to business

activities.

Economic treaties will be added advantages to business cooperation from

one country to another country. Treaties are development of business along

with the good relationship with countries. It is also bring the new outlook to

business activities in this way to achieve the short term goals of business like

as profit maximization and long term goals like as wealth maximization.

Strategic alliances is the another form of business development tool to

multinational companies. Strategic alliances is entering to partnership to sell

the products and services of the partner firms who are entering business deals

with the new market and new enterprise in this way to dump their products

and services to entire world market and earn a maximum profit and share the

profit to their partner.

Business concepts are changing from time to time. It depends to business

environment and global environment. Intellectual capital will play very

dominant role in next century. Intellectual capital business is enhanced with

products and services. It will be control, manage, admin and effectively

achievement of means and ends.

Economic Turmoil and global recession will bring either ruin the business or

bring the new opportunities to business. We can redefine the business and its

policy of an enterprise. A Business Leader examines the real circumstances

which are coping with economic indicators of the state. Business

development managers are estimating the future demand and supply of

products and services which are offering to ultimate customers who are

located in different region. Economic turmoil vanish the confidence to

survival of the business and slowdown the demand of the products and

services. America, England, Japan, Germany, China. Japan and India are

failure to curb the economic turmoil and global recession due to failure to

application of appropriate strategy.

In this book, generally overlook to the core area of the business and its

policy towards the strategic goals and objectives. Business determines the

structure of an enterprise how that enterprise system supports; protect the

nature of business in this way to make the emerging business process in

terms of growth and development the business activities. Secondly the

tolerance management of strategy and its concepts towards an organization

in this way to how to manage and admin the different nature of activities

those are different from one strategic business unit to other strategic business

units. Thirdly, dynamic strategic competitive analysis in terms of

competitors, core competence and value chain analysis: it involved in terms

of internal environment and external environment that decides to primary

and secondary activities of business. Fourthly, the managing cost of business

that will be needed to business leader who are effectively implementation of

generic strategies and grand strategies in business, for these purpose,

strategic leader should overlook the strategic analysis, situation analysis and

strategic tools application in business to determine major and minor goals

and objectives of an enterprise. Fifthly, Strategist are in formulate of

business means and ends that way to implementation of functional level

strategy in a different business segment and to analysis to strengths and

weakness and opportunity and threat of an entity to know core competence

of the business activities and know how to over come the competitors in

different market and different segment. Finally, we will be involved the

implementation of means and ends with an appropriate manner and

accomplish strategic means and ends in different manner. In this book

indicates the recent changes in business and its scope to learn and manage in

a intellectual way to normalize business functions at a maximize the utility to

framework the business policy that will be helpful to develop strategy,

implement strategy and evaluate and control the strategy by applying the

strategic tools like as industrial analysis, situation analysis, competitor

analysis, value chain analysis, business environment analysis, tailoring

strategy which suitable to an enterprise and gain the competitive advantage.

TRADIATIONAL DEFINITION OF BUSINESS

The term ‘typically` refers to the development and processing of economic

values in society. Normally, the term is applied to portion of economic

activities whose primary purpose is to provide goods and services for society

in an effective manner. It is also applied to economics and commercial

activities of institutions which having other purposes.

Business principally comprises of an all profit seeking activities of

the organization which provide goods and services that are necessary to

economic system. It is the major economic pulse of a nation, striving to

increase society’s standard of living. Finally, profits are a primary

mechanism for motivating these activities.

Business is in any organization which makes distribution or provides

any article or service to the customers, who are belonging to members of

the society. Business may be satisfied customers needs for these purpose

customers are able and willing to pay for it.

Business may be defined as “the organized effort by individuals to

produce goods and services to sell these goods and services in a market place

and to reap some reward for this effort.”

Functionally, we may define business as “those human activities

which involves production or purchase of goods with the object of selling

them at a profit margin”. Issues of business as outlined:

� The term business refers to the state of being busy for an individual,

group, organization or society.

� It is also interpreted as one’s regular occupation or profession or

economic activities.

� It deals with particular entity, company, organization, enterprise,

firms or corporation.

� It also interpreted as particular market segment sector like computer

business and it included under term business.

� It is wide and willing to use different activities

� It consists of purchase, sale, manufacture, processing, marketing of

products, services like manufacturing, trading, transportation,

warehousing, banking and finance, insurance and advertising etc.

� It is clearly stated that all business activities main purpose is to earn

profit. Profit as a surplus of business and it accrues and distributed to

the owners of the business. Business has to pay wages to workers

who work in the business. People invests money in business due to

be getting retain. Retain is profit from the business. This is awarded

to investor because of they are taking the risk.

� Profit is the motive for the investor who serves and run business and

it is the stimulation effort of the business for growth, survival of

business.

� taking the risk.

� Profit is the motive for the investor who serves and run business and

it is the stimulation effort of the business for growth, survival of

business.

MOTIVE OF BUSINESS

Organizations are dividing into two parts: Part one is trading able and willing

to pay for it.

Business may be defined as “the organized effort by individuals to

produce goods and services to sell these goods and services in a market place

and to reap some reward for this effort.”

Functionally, we may define business as “those human activities

which involves production or purchase of goods with the object of selling

them at a profit margin”. Issues of business as outlined:

� The term business refers to the state of being busy for an individual,

group, organization or society.

� It is also interpreted as one’s regular occupation or profession or

economic activities.

� It deals with particular entity, company, organization, enterprise,

firms or corporation.

� It also interpreted as particular market segment sector like computer

business and it included under term business.

� It is wide and willing to use different activities

� It consists of purchase, sale, manufacture, processing, marketing of

products, services like manufacturing, trading, transportation,

warehousing, banking and finance, insurance and advertising etc.

It is clearly stated that all business activities main purpose is to earn profit.

Profit as a surplus of business and it accrues and distributed to the owners of

the business. Business has to pay wages to workers who work in the

business. People invests money in business due to be getting retain. Retain

is profit from the business. This is awarded to investor because of they are

organizations and Part two is Non Trading organizations. Trading

organizations main concepts is earning profit; it is main motive of business.

In other words, Non trading concern main concepts is rendering services to

society. We will know the main issues that are relating to profit, it is a main

motive of business:

� For every kind of business organization, profit is often regarded as

motive for the entrepreneurs and it measure the overall performance

of the business.

� Profit is the tool for measuring and evaluation of the business

efficiency and productivity at the managerial competence.

� It is helpful to strategic managers how to take well decisions and

actions which are turn into effective in the form of able to combine

and utilize the available resource and able to sustain the organization

with growth and survival of the business entity.

� Business managers who will take higher efficiency and risk and

certainly expect greater volume of the profit from the business entity.

� Business efficiency expressed in terms of percentage of profit to sales

volume, to capital employed, to market value of corporate shares.

� Outside investors eager to know the profit of the firm and to make

assessment about their commit funds and effective utilization of

funds will be in the business entity.

� Peter F Drucker has drawn some conclusions about what is a

business and what are useful from the business and how to

understand the term business. His conclusions that Business is

created and managed by the people a group of people who will be

taken decisions that will be determined whether an organization is

going to prosper or decline, whether it will survive or will eventually

perish. This conclusion is true in the business. And business cannot

explain in terms of profit.

INNOVATIVE CHARACTERISTICS OF BUSINESS

Business is to provide goods and service to the people. It provides

the public with the things, it needs and wants in order to survive,

enjoy life and improve in a material sense. From the point of view

of consumer, business is the satisfier of needs and desire of the

customer demands which should be provided by business.

Goods that have been produced or procured for sale in retain for

price enter the realm of business. This activity of selling results is

the creation of the wealth for the society. In satisfying demand,

business uses the resources of land, labor and capital. These

resources when taken separately have little value; but business

combines structures and refines the resources to produce to the

value of the society. Further, business employees’ who exchange

their talents for wages and salaries. Therefore, these people

exchange their compensation for the desired goods and service.

Business is profit-seeking activity. It supplies goods and services to

customers who are satisfy their demand and desire. It adds to

society’s value by earning of a profit. Profit is the biggest stimulus

for maintains the survival of the business and its future

development. Society has permits business to earn profit as a

reward for assuming the risks of operating a business.

Business is also an essential participant in society. For satisfying

society demand which supplying goods and services and earning

profits. Business involves the most fundamental activities of the

society. As a result, Society has looks to business for something

more than products, services and profits. It looks to business for

leadership and direction in helping to achieve society’s objectives.

It expects business to assist in the establishment of a better service

to the society.

BRANCHES OF BUSINESS

Business includes the total enterprise of the country. Business activity

has two branches. They are as follows:

Industry

Commerce

INDUSTRY

In broad sense, industry is the branch of business activity which

concerned with raising production, fabrication or possessing of goods and

services. In other words, industry is an activity concerned with conversion of

raw materials or semi finished goods into finished goods. Industry provides

two types of goods namely; Consumer goods and Industrial goods.

Consumer goods are those goods manufactured by industry for ultimate use

of a customer. For instance brush, Paste, cloth and food products etc.,

Industrial\Capital goods are those goods produced and used for further

production. For instance like machineries, tools and raw material etc.

KINDS OF INDUSTRY

Industry is further classified into five broad types. They are as listed

below:

1. Extractive industries

2. Genetic industries

3. Manufacturing industries

4. Construction industries

5. Territory \ Service industries

Extractive Industry

Extractive industry are those industries concerned with extraction of

wealth from surface of the earth, soil, forest, water, air etc, for instance

agriculture, mining etc.,

Genetic Industries

Genetic industries are those industries concerned with reproduction

and multiplication of plants animals for making profit on their sale. For

example, Nurseries, cattle building and poultry farming.

Manufacturing Industries

Manufacturing industries are engaged in the conversation and process of raw

material through separation, combination, and transformation into finished

goods. Such as machinery and plants of all types, iron and steel, sugar, paper,

cotton clothe, electrical appliances, zinc ore, paper pulp water power, etc.,

Construction Industries

Construction industries are concerned with the construction of roads,

railways, dams, canals, buildings, bridges etc. there are mainly concerned

with the manufacture of non-moveable items.

Territory or Service Industries

Service industry which produce intangible goods, those which cannot

be seen or touched included in this category are banking, transport,

insurance, communication and services of a professional nature such as

lawyers, doctors, dentists, management consultants, advertisers, chartered

accountants and engineers, etc.,

Commerce

Commerce has been defined as “the sum total of those processes

which are engaged in the removal of the hindrance of persons (trade), Place

(transport and insurance), and time (warehousing) in the exchange (banking)

of commodities”.

Trade

Trade means sale, transfer, or exchange of goods and services,

through certain ancillary functions like packing, warehousing, banking,

transportation, Insurance, and advertising. Trade may be as Domestic Trade

and International Trade.

CREATIVE OBJECTIVES OF A BUSINESS

Business Purpose

Business has some purpose. These purposes are listed below:

� It is to create customers.

� It is create customers for selling of their products and services.

� It is create market.

� Customers determine the main purpose of the business.

� Customers are the basic foundation of the business and keep its in

existence in the market.

� It is exists because of catering to material needs and requirement of

the society, individual persons, government institutions, company,

firms and enterprise.

� Business is run with in the purview of the legal and general public

interest.

� It is ultimate force of an economic expansion, growth and change.

In general sense, enterprises pursue multiple objectives rather than a one

objectives. Strategic manager has identified a set of main business

objectives. These pursued by a large cross–section of enterprises.

Profitability, productivity, efficiency, growth, technological, dynamism,

stability, self reliance, survival, competitive strength, customer services,

financial solvency, product quality, diversification, employee satisfaction

and welfare and so on are the major objectives of enterprise. Enterprise looks

for balance of these objectives in appropriate and suitable manner. Important

business objectives are listed below:

Figure 1.1 has identified the creative objectives of business as outlined:

� Survival

� Stability

� Growth

� Profitability

� Efficiency

Survival

� An organization mission statement reveals the organization’s

intention to secure its survival through development growth and

profitability of the business.

� It is will and continue the business concern into the future as long as

possible perpetuate anxiety, Strategic managers take more

responsibility for survival of the organization business.

Figure – 1.1: Creative Objectives of Business

� Therefore, Survival is an assumed goal of the business, if strategic

managers often neglected survival, its impact on strategic decisions

making for long term.

� It is basic and implied objectives of the most organizations.

� It will be gained more value and important during the stage of the

beginning of the business enterprise and during the general

economic adversity of business.

� The survival refers to the function of the nature of ownership, nature

of business competence of management, general and industry

conditions, financial strength of the business enterprise or any type

of business concern.

� All types of enterprises will be interested in more than mere

survival.

Stability

� Stability is one of the important objectives of the business enterprise.

� It will be cautious, conservative objective

� It is a least expensive and risky objectives in form of managerial

time and talent and other resources,

� A good and steady enterprise always minimizes its managerial

tensions and reduces its dynamic nature decisions which are taken

from managers.

Profitability

Stability

Growth

Efficiency Objectives of a

Business

Survival

� It is least resistance compare to other objectives and hostile to

external environment.

Growth

� An organization growth is closely associated with its survival

and profitability and equated with dynamism, vigor, promise,

and success.

� Growth refers to overall development of the organization

activities in terms of increase in assets, manufacturing

facilities, and increase in sales volume in existing or through

new product in this way improves profits and market share.

� Growth may be proactive change is a necessity for dynamic

business environment.

� Growth refers to in terms of expansion business, increase

manpower employment, diversification and acquisition of

business and create unknown risky paths in this way

organization looks for survival, profitability and growth of the

business activities.

Profitability

� Profitability is the vital goals of a business organization.

� Profit is the sole motive of the business enterprise.

� Private business enterprises are operated on behalf of the

owners and its benefits also goes to owners of the enterprise.

� Strategic managers should know how to measure profitability

or how to define profitability either the long term or short

term of the organization.

� Profitability clearly indicates of an organization’s ability to

satisfy the principal; claims and desires of employees and

stakeholder of the organization.

� Strategic mangers analyses, interpretations of profit of the

organization, how it impact on survival of the organization in

the future.

Efficiency

� Efficiency is one of objectives of the business.

� It helps to business to achieve goals and success of the

business

� Efficiency refers to best utilization of available and scarce

resources and brings the highest productivity in business

activities.

� It is useful operation objectives due to effective utilization of

economic version of the technical objectives which for

achieving productivity and designing suitable input and

convert into output for effective utilizing of funds, resources,

physical facilities and so on in enterprise.

LONG TERM OBJECTIVES OF A FIRM

Short run profit maximization is rarely based on the best approach to

achieving sustained corporate growth and profitability of the firm. It is

recognized by the strategic managers of the firm. Therefore, to achieve long

term prosperity purpose strategic managers designed long term objectives.

Long term objectives of the firm or company or organization as listed below:

� Profitability � Productivity

� Competitive position

� Employees development � Employee relationships

� Public responsibility

� Technological leadership

Profitability

Profitability is an important functional area of the long-term

objectives of the firm. The ability of any business is to operate in the long

run depends on attaining on acceptable level of profits. Strategically

managed firms characteristically have a profit objective usually expressed in

return on equity.

Productivity

Productivity is essential need for each strategist in the corporation.

Strategic managers try to improve the productivity of their systems.

Companies that can improve the input–output relationship normally increase

profitability. Productivity objectives are some times stated in terms of

desired decreases inmost. This is an equally effective way to increase

profitability.

Competitive Position

Competitive position can increases profitability and productivity of

the company. Companies or firms or organization’s Competitive position

reduces the cost of production of the output. The corporate success depends

on the firm’s competitive position. It is strongly dominated in the market.

Employee Development

It refers to experienced employees are the asset of the organization.

For long-term purposes, the company’s employees need training for further

course of action that effectively and efficiently managed to produce

productivity in the competitive position. Therefore, it is one of the major

long-term objectives of the organization.

Employee Relationships

All companies actively seek good employee committed relations

with organizational environment. Strategic manger should know the

employee needs and expectations. Strategic managers take a decision to

welfare programme for the employees of the companies. It is only can

improved of the employee’s relationship in the organization.

Technological Leadership

Technological leadership can gives clear picture of the organization goals

and objectives for the long term changes in the business scenario many

companies state their objectives in terms of their technological leadership.

Public Responsibility

Business recognizes their social responsibilities towards to customer and

society. Public responsibility is buildup long-term images in the society by

through providing social work to public.

EXPERTS OPINION Of BUSINESS POLICY

Business Policy According to Glueck

“Development from business policy arose from the use of planning

techniques by managers. Starting from day to day planning in earlier times,

managers tried to anticipate the future through preparation of budgets and

using control systems like capital budgeting and management by objectives.

With the inability of these techniques to adequately emphasize the role of the

future, long range planning came to be used. Soon, Long range planning was

replaced by strategic planning, and latter by strategic management: a term

that is currently used to describe the process of strategic decision making”.

Business Policy According To Christensen and Others

Business policy is “the study of the functions and responsibilities of senior

management, the crucial problems that affect success in the total enterprise,

and the decisions that determine the direction of the organization and shape

its future. The problems of the policy in business, like those of policy in

public affairs, have to do with the choice of purposes, the moulding of

organizational identity and character, the continuous definition of what needs

to be done, and the mobilization of resources for the attainment of goals in

the face of the competition or adverse circumstances”.

� It tends to focus on the rational analytical aspect of strategic

management.

� It presents a design framework for understanding for strategic

decision making.

� Strategic framework enables an individual to make preparations for

handling general management responsibility effectively and

efficiently.

� Business course introduced by the Harvard Business School and

origin of its business policy traced back to 1911.

� It is integrative course in management and aimed to the creation of

general management capability.

� This course was based on interactive case studies that had been use at

the school for instructional purposes since 1908.

� It intended to enhance general manager capability of students.

� The introduction of business policy is the curriculum of business

schools and management institutes came much later, in 1969.

� The American Assembly of Collegiate Schools of Business is a

regulatory body for business schools. It made that the course of

business policy is a mandatory requirement for the purpose of

recognition.

� This course spread to different management institutes across different

nations and become an integral part of management curriculum.

� It is considered as a capstone, and integrative course offered to

business students who have previously been through a set of core

functional area business course.

� The term ‘Business Policy ‘had been traditionally used in the

business schools in world which though new titles for the course have

begun to be introduced in recent years in India.

NEED OF BUSINESS POLICY

� They tend to serve as precedents and thus reduce the repetitive

rethinking of all the factors of individual decisions which they save

time.

� Policies aid in coordination, if a member of individuals are guided by

the same policies, they can predict more accurately the actions and

decisions of others.

� Policy provides the stability in the organization, a certainty of action

is assured even though the top management may any change. The

policies continue and this continuity promotes stability in the

organization and thus reduces frustrations of members.

� Clear policies encourage definite individual decisions. Each

functional manger has clearly understanding the range policy within

the organization which helpful to make decision and thus feel less

uncertain as to whether he\she can give answers to subordinates

without “getting into trouble”.

� Policies clearly specify routes towards the related goals of the

organization. Policies serve as a standard or measuring yard for

evaluation performance in the organization. The actual results can be

compared with the policies of the organization which is to determine

how well the members of an organization have lived into their

professed and intentioned to what extent goals have been achieved.

� Sound policies help to build up employee enthusiasm and loyalty for

the organization. This is specifically true when they reflect

established principles of fair play and justice and when they help

people to know that within an organization.

� They setup the pattern of behavior and permit to participants to plan

with a greater degree of confidence and lead to better co-operation in

the organization.

� Policies are monitored and controlling of the organization which

guides for delegated decision-making. They seek to ensure

consistency and uniformity in decisions relating to problems that

recur frequently and under similar. But not identical circumstances.

� Policies always with clarity, relevance and reasonableness and enable

a firm to make the optimum utilization of scarce available resources

and thereby bring about an efficient level of operations because

wastage must be avoided.

� Corporate policies always buildup an image of the business in the

eyes of the public and this brings in more reputation, goodwill; sale

and profits so that more and more acts of social responsibilities may

be undertaken by organization.

� Proper administration and implementation of policies that encourage

initiative in the employees so that they act with full responsibility

with in the framework of the policies of the organization. This

naturally improves the working environment like very good-labor

management relations within the organization.

DIFFERENT TYPES OF BUSINESS POLICY

Different types of business policy as follows:

� On the basis of level of management

� On the basis of functional areas

� On the basis of expression

� On the basis of nature of origin

� On the basis of scope of organization

� On the basis of nature of management function

ON THE BASIS OF LEVEL OF MANAGEMENT

Business policies are framed at different levels of the management, and

accordingly then may be classified as

Top Level Management Policies

These policies are derived from the top management for planning

and decision making. The top management principally comprises of the

Board of Directors, chairman /president, vice president/vice-chairman,

managing director, general manager etc, and the top management frames the

policies by themselves and it is, therefore, responsible for these. These

people are the ultimate level of authority in the operation of the enterprise.

The policy makers plan to set of the objectives, define the goals, establish the

policies, see that these policies are put into effect and judge the results.

The top management policies involves with the long range product

selection extent of its diversification, a acquisitions and mergers of two or

more units, spin-offs-their nature, extent and liability-sales forecasting sizing

the enterprise, process of selection, machine selection, determining site,

location and needs of the plant, decisions regarding investment of available

resources in capital and human research development, settlement of

problems of executives regarding their promotion, transfer, retirement etc.,

and accomplishment of the organization objectives/goals.

Middle Level Management Policies

These policies are the out-come of the deliberations of the executives at the

upper middle and middle level. The upper middle management consists of

the head of the personnel administration department like Production

manager, sales manager, marketing manager, financial manager, deputy

general manager and assistant manager etc, their executives are responsible

for research, finance, accounting and marketing etc,

They lay down the policies regarding upon the establishment of organization,

selection of the best-suited executives staff and employees to carry out the

plans, installation of proper departments, designing of operating policies and

operating routines, deciding processes, methods and techniques of

production which exploration of new markets and decisions about channels

of distribution for assignment of duties to each department and to each

individual, who are deciding about source of manpower, resources and their

selection, deciding about wage, salary and incentive plans for them, obtain

necessary finances, controlling costs and solving problems of actual sales

activities etc.,

Middle management consists of the deputy heads of the various sections

under different functional departments-employment and training, industrial

relations, labor welfare and social security. Junior executive, superintendents

of departments divisions etc., these executives are the deputy head of the

functional department like sales, production, research, Finance and

accounting divisions of the organization. They frame policies are known as

middle management polices.

Lower Level Management Policies

The lower level management people are men and women who have direct

supervision over the working force in office, factory, sales field, and other

areas of activity of the organization. They are directly related to the

accomplishment of the task for the small sub-divisions of the whole

enterprise. They chalk out policies or the assignment of the jobs to the best

suited persons in the organization. The lower level management policies

guidelines of the provision of adequate tools, raw materials, training of the

workers, issuing of orders, maintenance of quality, improving working

conditions, morale, maintaining discipline and controlling absenteeism etc.

Operating Force Policies

These are the rules or a code for doing the job which enriched to a particular

worker performance. These are usually written down in the notebooks of the

organization. Operating policies notice to the worker how long each job

work should take a time, what tricks of the trade are required, and what

quality feature are emphasized.

ON THE BASIS OF FUNCTIONAL AREAS

On the basis of functional areas business policies may be classified as

production policies, marketing and sales polices, financial policies and

human resource development policies.

Production Department Policies

Production policies are framed and concerned with the following

issues:

The product to be produced (product line, type of product)

The type of technology, processes, equipment and tools, to be

used

The selection of factory\office\plant site, location and layout.

The decisions regarding scale of production

Making of production budgets manufacturing costs and deciding

about total cost and cost of installation and its maintenance

The selecting of junior executives;

Inventory control

Collective bargaining and labor relations

Organization and co-ordination of their activities

Selection of systems of quality, cost production control.

Production policies are the basic determinants of the total policy

making procedure.

Marketing and Sales Department Policies

These policies relate to policies in market analysis, business law, display,

salesmanship and advertising etc, i.e. they are concerned with total process

of marketing which covering both ‘product mix’ and ‘market mix’. The

product mix includes decisions regarding the type, quantity and quality of

product design, contents shape, methods and techniques of production etc.

Market mix covers the issues like price, place, promotion, channels of

distribution, advertising policies, packaging and branding decisions,

consumer psychology and behavior and pricing of the product etc.

Since the modern concept of market has treated as ‘consumer as a

king’, every product is brought to satisfy customer needs. Hence its gamut is

very fast. The policies in this field, therefore, deal with the following issues:

Spotting out of the present and potential markets, the size and nature

of consumers.

The degree of competition in the market and how best could it be

met.

The location of prospects and persuading them to purchase.

Fixing price of product, offering rebated, discounts and other

concessions.

Compensating salesman adequately; and providing them with

training and developmental opportunities.

Selecting channels of distribution or employing representatives and

agents.

Dividing the total market into branch or dealer areas.

Establishing advertising policies like:

i. Setting up sales control policies.

ii. And establishing sales volume and expense budgets.

Financial Department Policies

Financial policies may be regarded as the most important business policies of

the organization. It depends on the entire success and failure of a business

unit of the organization. Properly and careful framed financial policies help

to effective utilization of the resource like men, machine, market, method,

materials and long term survival of the business while improper framed

financial policies are ruin to business activities of the organization.

Financial policies are essential to organization. They are as listed below:

To know the capital requirement of the organization in terms of

short, medium and long term-and know the how to

procurement and effective utilization of finance in the

organization.

The method of raising funds and the ratio between the various

types of sources of funds, particularly the proportion of owned

funds to borrowed funds.

Utilizations of the funds and the ratio between different types of

asset.

The credit policy, declaration and distribution of dividend to the

shareholder.

Profit policy, provisions for taxes, renovations and modernization

of plants and machinery.

Costing policy includes the policy for selecting the method of

costing, the method of allocating, apportioning, reapportioning and

absorbing overheads.

Accounting policy includes the following areas:

The basis of valuation of stock in trade at the year end;

whether at total cost, or at direct cost or at works costs.

The issue price of the raw material; whether to follow first

in first out method or last in first out method or average

cost or any other methods of issue of raw materials

Depreciation policy; whether straight line method or

reducing balance method or mileage method or any other

method.

The treatment of deferred revenue expenditure, intangible

asset, fictitious assets and preliminary expenses.

Capitalization of expenditure during construction period

The policy for provision of bad and doubtful debt,

investment losses, etc.

Human Resource Development Department Policy

Personal policy are concerned with human resource utilization, its

recruitments and selection, source of supply, training of employment,

training of the employees at whole cost; the promotion and transfer policy,

the issues regarding compensation to the employees, wage incentive and

other perks, benefits and services etc.

ON THE BASIS OF EXPRESSION

On the basis of expression policy may be classified into express

policies, oral policies and written policies

Express Policy

Express policies are those policies, which expressed in terms in clear

words either orally or in writing.

Oral Policies

Oral policies are those, which are issued or stated by the management

in terms of words of mouth to their subordinates. Such policies are generally

adopted when an organization is small and face-to-face communications is

desired. Since they are direct, they are more effective and, hence can be

bettering understood and implemented. They are more flexible and can be

adjusted to be different organizational conditions.

Limitation

First is the main drawback of such policies are not written as such.Second is

the interpreted in any way by the persons receiving them.Thirdly they are

often not remembered for long time and easily forgotten, especially when

there are number of policies and where their frequency of issues is great.

Therefore, usually oral policies are not in popular use.

Written Policy

Written policies are those, which are normally, pull in black and

white and stated in clear terms so that persons whom they are addressed to

easily understand them. For putting the policies in written, much care has to

be taken, for instance;

� Policy is always written in terms of words which neither

vague nor unnecessarily academic, nor in any way

offensive to those for whom it is meant.

� Words, sentence and paragraphs should be short and

statement of policy should be complete and precise.

� It should not contain irritating words are expression

antagonistic or cast as persons on others.

� The tone should be warm, without use of any legalistic

phraseology

� The frame should be convenient and handy for

management reference and application.

Written policies are desirable in the following situations:

� The subject matter on which a policy is to be formulated,

is of a very controversial nature

� The distance between the top and lower levels of

management is so wide as to make personnel/informal

contact and communications rather difficult.

� Consistent treatment all is needy and certainly of action

desired.

� Preciseness and complete understanding is needed to

convoy to the employees at the different levels.

Advantages

There are distinct advantages of written policies are as follows:

The writing of policies makes commitments on the part of

an organization

Writing ensures uniformity of application and assures

continuity of action even when the management is

changed.

Its limits freedom of action on the part of the

management, for it is work with in the boundary of

policies.

The written policies provide something concrete on which

to base an appeal if there is any disagreement about what

is the organization’s policy.

Writing helps to ensure that the professed policies are

right for organization tries to put its best foot forward.

The likelihood of wrong interpretation or

misunderstanding is very much lessened.

Written policies facilitate easy and smooth compliance.

The results in greater convenience both to the policy

frame worse and implementers

However, written policies cannot be easily changed and perfect secrecy,

when desired cannot be maintained and writing of good policies needs

fluency in English that every person does not possess.Even then, in all

large organizations, written policies are a rule rather than exception.

Implied Policies

These are the policies, which are implied from the code conduct or

from mode of behavior of business executives; but they are not stated in

terms of orally. They generally flow from philosophy of the business, it is

social values and even traditions, for instance, smoking and drinking may be

prohibited not in writing but it implied by the conduct of superior executives

who refrain from these habits while on the duty.

Originated Policies

Originated policies emanate from the company objectives which are

determined by the top management, who are primarily responsible for

shaping business policies to guide and direct them and the subordinate in the

attainment of organization’s objectives these are framed by the board of

directors the president and general manager etc, and passed on to the

executives in hierarchy for implementation.

The subordinates usually readily accept such policies because they

have been framed by higher ups in power that entrusted with the shaping of

business policy for concern.

Appealed Policies

Appealed policies are often known as “suggested policies”. Because

they are framed on the suggestions of the subordinates or those who are

implement the policies. The idea is to make a policy is more effective so that

particular problems could find solutions under it. Such policies also have

general acceptance as that of the originated policy because, they have already

got the approved of the top management.

Index

Absolute cost advantages 290

Acceptable 150

Achievable 151

Achieving locational advantage 398

Achieving superior efficiency 305

Acquiring and restructuring 257

Adaptive culture 408

ADL matrix 283

Advantages of globalization 94

Analytic 117

Annual objectives 128

Ansoff’s product 280

Appealed policies 40

Appraisal of performance 233

Asset sales and closures 264

Augmented marketing 210

Backward linkages 447

Balance 161

Balanced score card approach 147

Bargaining power of buyers 293

Bargaining power of suppliers 293

Barriers to entry 325

BCG matrix 276

Benchmarking 469

Benchmarking process 472

Benefits of strategic management 121

Best cost provider strategy 196

Bidding strategy 327

Boosting revenues 355

BPR approach 463

Branches of business 21

Brand loyalty 289

Bruce Henderson 159

Budget systems 422

Building core competency 236

Business 15,17

Business level 119

Business level strategy 179

Business Policy 29,31

Business process reengineering 453

Business purpose 22

Cadbury’s vision 131

Chaining 359

Change process 384

Changing the leadership 264

Charles Greer 233

Chnanging orientations 109

Christensen 29

Clifton Garvin 51

Combination efforts 356

Combination strategy 246

Commerce 21

Commercialization 330

Common driving force 172

Communication network 96

Companies go global 95

Company opportunities 183

Company profile 59

Comparative account 180

Comparison and competitors 70

Compensation 234

Competing in mature industries 343

Competitive environment analysis 101

Competitive position 149

Competitive position 27

Competitive situation 165

Competitive structure 291

Competitive success 171

Competitor analysis 161

Competitors 76

Complementary assets 361

Components of mission statement 135

Components of strategic management 122

Concentrated marketing 213

Concentric diversification 256

Conflict aftermath 382

Conglomerate diversification 256

Connecting customers 204

Construction industries 22

Continuous process 110

Control 209

Control and evaluation 114

Control and evaluation 129

Cooperation in a competitive environment 102

Coordination 137

Core business process 455

Core competencies 95

Corporate culture 404

Corporate decline 261

Corporate level 118

Corporate level strategy 179

Corporate strategy 138

Cost advantages 266

Cost leadership strategies 187

Crafting strategy 114

Crafting strategy 153

Creating competitive atmosphere 235

Credible commitments 322

Crisis ridden business 352, 358

Critical success factor analysis 161

Customer responsiveness 313

Customer time cycle 466

Customers 75

Cutting cost 355

Deciphering a culture 409

Declining industries 348

Defining organization mission 136

Demand conditions 291

Demand uncertainty 256

Demarketing 213

Demographic environment analysis 85

Developing a strategic vision 144

Developing the marketing mix 205

Development of strategy 132

Differential marketing 213

Differentiation strategy 189

Dilemma of business 15

Direct marketing 210

Directional policy matrix 160

Directional strategies 239

Disadvantages of globalization 94

Distribution situation 165

Diversification 282

Diversification 250

Divestment strategy 267

Divestment strategy 246

Divestment strategy 371

Division of work forces 236

Dominant economic features 169

Downstream or forward integration 253

Driving force 171

Dynamic response 100

E commerce environment 488

Economic environment 80

Economies of scale 290

Economies of scope 258

Educational institutions 491

Efficiency 26

Elements of strategy 132

Emerging foreign markets 401

Emerging industries 337

Employee development 149

Employee Relationships 149

Employee relationships 28

Employee’s development 28

Empowerment of human resources 236

End game strategies 269

End game strategies 356

Enlightened marketing 213

Environmental scanning 74

Ethics and culture 237

Ethnic mix 88

Exchange of information 55, 56

Exchange resource 55, 57

Executive summay 209

Exit barriers 292

Expansion strategy 243

Expenditure budgets 423

Export strategies 392

Express policies 37

Extent of sharing culture 408

External diversification 252

External environment 54

Extractive industries 21

Facilitation of change 235

Failure of acquisitions 326

Family ownership 103

Feature of generic strategy 197

Features of grand strategies 241

Felt conflict 382

Finance and accounting policies 214

Financial attractiveness of industry 176

Financial policies 35

Financial strategy 215

Financial strategy formulation 214

Five force model 287

Five forces analysis 160

Flexible 150

Focus strategy 191

Formation of Regional Block 99

Forward linkages 446

Fragment industries 349

Framework of strategic analysis 166

Framework of strategic management 106

Franchising 360

Franchising strategies 394

Functional approach 59

functional areas 33

Functional level 119

Functional level strategy 179

Functional manager 117

Functional strategies 128

Fundamental elements of mission 135

General electric model 285

General management 62

General manager 117

Generic strategies 185

Genetic industries 21

Geographic distribution 87

George Salk 158

Global area structure 427

Global area structure 432

Global company 93

Global competition 391

Global environment analysis 92

Global matrix structures 436

Global operational structure 430

Global strategy 179

Globalization of markets 386

Glueck 28

Government 83

Government agencies 492

Grand strategies 239

Grand strategy 127

Growth 25

Harvest strategy 371

High costs 262

Holistic 116

Horizontal diversification 252

Horizontal merger 360

Host country and government 334

Hostage taking 322

Human resource management 67

Human resources strategy 229

Identification 137

Implementation 114

Implementation control 420

Implementation matrix 441

Implementing and executing the strategy 155

Implementing BPR 462

Implementing TQM 308

Implied policies 39

Importance of Strategic management 108

Improved scheduling 255

Improvement of logistics 225

Improving profitability 265

Inadequate financial controls 262

Inbound logistics 65

Income distribution 88

Industries key success factors 175

Industry 21

Industry and competitive analysis 168

Innovative 20

Institutionalizing the strategy 128

Intellectual process 110

Internal analysis 58

Internal assessment 58

Internal diversification 252

Internal environment 51

Internal environment 54

Internal factors 68

International division structure 429

Internet economy 486

Internet technology 487

Investment in specialized assets 255

Issues in project implementation 449

Issues in strategy implementation 447

Joint venture 331

Just inventory system 307

Kenichi Ohmae 158

Key issues of technology 90

Latent conflict 381

Leadership strategy 371

Least resistance 100

Legal 83

Levels in organization 117

Levels of control 418

Licensing strategy 392

Life cycle of a joint venture 333

Limitations of financial budget 217

Location strategies 268

Logical framework 180

Logistics strategy 224

Long term contract 321

Long term objectives 125

Long term objectives 147

Long term objectives 27

Longterm nature 109

lower level 33

Macro environment 73

Maintaining market discipline 322

Management of funds 218

Manifestation of globalization 96

Manufacturing industries 22

Market 78

Market control 421

Market development 248

Market development 282

Market penetration 248

Market penetration 280

Market segmentation 160

Marketing analysis 208

Marketing and sales 66

Marketing budget 209

Marketing intermediaries 77

Marketing issues 202

Marketing planning 208

Marketing process 204

Marketing strategy 209

Marketing strategy and efficiency 306

Marketing strategy formulation 201

Marketing strategy techniques 210

Mature industries 362

Mckinsey’s 7’s framework 295

Measurable 150

Medical organizations 491

Mic ro environment 72

Michael Porter’s 185

middle level 32

Mission 133

Mission and strategic intents 146

Mission of BCG 276

Mobility of skilled resources 98

Monitoring developments 156

Motivating 150

Motive of business 19

Natural environment analysis 88

Nature and extent of competition 102

Nature and strength of competition 170

Nature of globalization

Need for explicit mission 134

New competition 263

Niche strategy 371

Non political 117

Non price competition 366

Non price competitive strategies 367

Obligations 126

Operating environment 75

Operational control system 422

Operational strategy 179

Operations 66

Operations planning and control 223

Opportunities 178

Opportunity 53

Opportunity and issue analysis 165

Oral policies 37

Ordering culture 408

Organization 77

Organization infrastructure 67

Organizational conflict 379

Organizational inertia 264

Organizational politics 375

Organizational structure 274

Organizing marketing 211

Outbound logistics 66

Over expansion 262

Past capabilities and performance 68

People 207

People evidence 207

Perceived conflict 382

Person marketing 211

Personal policy 36

PEST analysis 160

Peter F Drucker 19

Place 206

Place marketing 211

Policies 128

Political 84

Political and legal environment 82

Poor implementation 331

Poor management 262

Population size 86

Portfolio analysis 271

Potential competitors 289

Power 377

Premise control 419

Price 206

Price cutting 363

Price leadership 366

Price signaling 365

Primary activities 64

Proceed with caution 100

Process 207

Procurement 67

Product 205

Product development 248

Product development 282

Product life cycle 274

Product market expansion greed 248

Product situation 165

Production policies 34

Production strategy formulation 222

Production system 223

Productivity 148

Productivity 27

Profitability 147

Profitability 26

Profitability 27

Projected financial budget 216

Projected financial statements 216

Promotion 206

Protecting product quality 255

Public 77

Public responsibility 149

Public responsibility 28

Purposeful direction 235

Rationale BPR 461

Rationale for joint venture 332

Reasons for functional strategies 200

Reasons for globalization 93

Reconciliation and priorities 137

Recruitment and selection 223

Redefining strategic focus 264

Reduce transportation costs 96

Related diversification 251

Relationship marketing 210

Remote environment 79

Research and development strategies 227

Research and development strategy 225

Retrenchment strategy 246

Revenue budgets 423

Risk 162

Risks of Strategic management 122

salesmanship 34

Scale of entry 330

Scenario planning 160

Scheduling 424

Screening 327

Services 66

Services marketing 211

Setting objectives 147

Shaping external environment 101

Short term contract 321

Situational analysis 163

Six sigma 474

Six sigma methodologies 476

Social marketing 210

Socio cultural environment 84

Sources of conflict 380

Sources of funds 215

Sources of power 377

Stability 25

Stability strategy 242

Steps in BPR 463

Strategic alliances 321

Strategic response to environment 100

Strategic alternatives 185

Strategic analysis 159

Strategic business unit 272

Strategic change management 372

Strategic Choice 161

Strategic control system 416

Strategic decisions 112

Strategic finance and accounting 61

Strategic groups 173

Strategic HRD 62

Strategic leadership 411

Strategic management 105

Strategic management linkages 446

Strategic management model 114

Strategic management process 122

Strategic marketing 60

Strategic move of rivals 174

Strategic planning 109

Strategic production 61

Strategic reward system 424

Strategic uncertainty 142

Strategy revision 354

Strategy identification 181

Strategy implementation 161

Strategy of last resort 268

Strength 54

Strengths 177

Strong culture companies 406

Structuring strategic decisions 155

Subject matter of management 110

Substitute products 294

Success factors 70

Successful turnaround strategies 264

Suitable 150

Superior innovation 310

Superior quality 308

Suppliers 75

Survival 24

SWOT 53

SWOT analysis 161

Synchromarketing 213

System management 481

Tasks in Strategic management 114

Technical issues 222

Technological leadership 149

Technological changes 256

Technological environment analysis 89

Technological leadership 28

Technology development 67

Territory \ Service industries 22

The value chain approach 59

The vision 130

Thomson Watson 133

Threats 53

Threats 178

top management 32

Total Quality management 308

TOWS matrix 270

Training 233

Transferring competencies 258

Triggers of change 171

Turbulent high velocity markets 340

Turnaround firm 266

Turnaround strategy 261

Types of budget 217

Types of diversification 250

Types of strategic budgets 422

Understandable 151

Understanding 137

Understanding mission 137

Unforeseen demand shifts 263

Unhealthy cultures 407

Unrelated diversification 251

Upstream or back ward integration 253

Value chain 298

Value chain approach 64

Value creation process 299

Value delivery network 203

Vertical diversification 252

Vertical integration 254

Vertical integration 316

Weak culture companies 407

Weakness 54

Weakness and competitive deficiencies 183

Weaknesses 178

William Spender 199

Worth of business 220

Written policy 37