Advance Business Policy (Strategic Management)

It is a process of formulating, implementing, and evaluation of cross functional decisions to create a sustainable competitive advantage.

Stages of Strategic Management

Fred model of strategic management Step-1 Step-2 Step-3 Formulation of Strategy Implementation of Strategy Evaluation of Strategy

Step 1 Formulation of strategy - Vision statement - Mission statement - Organization analysis/scanning/audit Organizational analysis takes place on three levels - Executive /Corporate level - Business / Tactical level - Operational/ functional level Based upon Long term goals and objectives o Development of strategies o Selection of strategy Organizational analysis is of two types o Internal o External Internal factors analysis - Employees - Culture - Stakeholders External factors analysis (Indirect) - Govt policies - Economic conditions - Technology - Social/cultural - Natural environment - Demography External factor analysis (Direct) - Competitors - Suppliers - Labor supply - Regulators

How to conduct internal/external analysis to develop/create competitive advantage? SWOT (SW for internal scanning) (OW for external scanning)

There are approaches to do the audit for the development of the strategies. I/O ( Industrial Org view) RBV (Resource Base view)

I/O (Industrial Org view)

EFE Matrix (External Factor analysis) we can practice to scan the external environment

EFE Matrix External Factor Analysis

S.No 1 2 3 4 5 6 7

Factors Govt Policies Economic Technology Social Cultural Natural Environment Demographics

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CPM Matrix Competitor Profile Matrix

S.No 1 2 3 4 5 6 7

Factors

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There are total 5 Matrix 1 SWOT (Strengths Weakness Opportunities Threats) 2 SPACE (Strategic Position & Action evaluation) 3 BCG (Boston Consultant Group) 4 - I & E (Internal & External) 5 GSM( Grand Strategy Matrix) Classification 1 SWOT 2 SPACE 3 GSM Corporate Level

4 - BCG 5-I&E

Business Division Level

Step 2 Implementation of strategy Concern with all functional areas Leadership comes in to play Concern for Corporate governance Concern for culture of the organization Concern for Structuring & Design of the organization

Vision Statement
Definition:

A vision statement is sometimes called a picture of your company in the future but its so much more than that. Your vision statement is your inspiration, the framework for all your strategic planning. A vision statement may apply to an entire company or to a single division of that company. Whether for all or part of an organization, the vision statement answers the question, Where do we want to go?

Significant purpose: o What business are you in? o Purpose is your organizations reason for existence.

It answers the question Why? rather than just explaining what you do. It clarifiesfrom your customers viewpointwhat business you are really in Great organizations have a deep and noble sense of purposea significant purposethat inspires excitement and commitment. When work is meaningful and connected to what we truly desire, we are able to unleash a productive and creative power we never imagined.

A picture of the future: What will the future look like if you are living according to your purpose? A picture of the end result should not be vague. It should be something you can actually see Your picture should focus on the end result, not the process for getting there. Clear values: How do you want people to behave when they are working according to your purpose and on your picture of the future? Values provide guidelines on how you

should proceed as you pursue your purpose and picture of the future. They answer the questions, What do I want to live by? and How? They need to be clearly described so you know exactly what behaviors demonstrate that the value is being lived. They need to be consistently acted on or they are only good intentions. Most organizations that do have values either have too many values or they are not rank ordered. Research shows that people cant focus on more than three or four values or those values will not really have an impact on behavior. Also, values must be rank ordered to be effective. Why? Because life is about value conflicts. When these conflicts arise, people need to know which value they should focus on.

Vision Statement Definition: A mission statement is a brief description of a company's fundamental purpose. A mission statement answers the question, "Why do we exist?" The mission statement articulates the company's purpose both for those in the organization and for the public. 9 components of mission statement Mission statements can and do vary in length, content, format and specificity. Most practitioners and academicians of strategic management consider an effectively written mission statement to exhibit nine characteristics or mission statement components. Since a mission statement is often the most visible and public part of the strategic management process, it is important that it include most, if not all, of these essential components. Components and corresponding questions that a mission statement should answer are given here. 1. Customers: Who are the enterprise's customers? 2. Products or services: What are the firm's major products or services? 3. Markets: Where does the firm compete? 4. Technology: What is the firm's basic technology? 5. Concern for survival, growth, and profitability: What is the firm's commitment towards economic objectives? 6. Philosophy: What are the basic beliefs, core values, aspirations and philosophical priorities of the firm? 7. Self-concept: What are the firm's major strengths and competitive advantages?

8. Concern for public image: What is the firm's public image? 9. Concern for employees: What is the firm's attitude/orientation towards employees?

Indus Motors
Vision "IMCs Vision is to be the most respected and successful enterprise, delighting customers with a wide range of products and solutions in the automobile industry with the best people and the best technology".

The most respected. The most successful. Delighting customers. Wide range of products. The best people. The best technology.

Mission Mission of Toyota is to provide safe & sound journey. Toyota is developing various new technologies from the perspective of energy saving and diversifying energy sources. Environment has been first and most important issue in priorities of Toyota and working toward creating a prosperous society and clean world

Mission Statement seven Components

S.NO 1 2 3 4 5 6 7 8 9 Customers Product Market Technology Concern for growth/Development/Profit Philosophy Self efficacy (Core competency) Concern for society Concern for employees Component

Suzuki Motors
OUR VISION To be Excellent All Around. OUR MISSION To provide vehicles of international quality at competitive price. To improve skills of employees by imparting training and inculcating in them sense of participation. To achieve maximum indigenization and promote the automobile vending industry. To contribute to Pakistani society through development of industry in general and automobile industry in particular.

Mission Statement Seven Components

S.NO 1 2 3 4 5 6 7 8 9 Customers Product Market Technology Concern for growth/Development/Profit Philosophy Self efficacy (Core competency) Concern for society Concern for employees Component

EFE Matrix External Factor Analysis

S.No 1 2 3 4 5 6 7

Factors Govt Policies Economic Technology Social Cultural Natural Environment Demographics

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