1 - Policy & Strategy Defined(2)

8/13/2019 1 - Policy & Strategy Defined(2)

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Business Strategy


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extension of Business

Policy

Policy refers to the goals and direction of a

company that considers the internal dynamicsof

a firm. (resources, strengths/weaknesses)

Policy is a predecessor to what is now a broader

field of strategic management.

Business Strategy looks not only internally, but

also externally.


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Strategy is about..

InternalAct

ivities Resources

Planning

Processes

People

ResponsibilitiesExternalFactors Customer

Competition

Economy

Trends

Suppliers

Government ThatleadtoStr

ategy

ProductOfferings

Services

ImplementationPlans

Policies


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Michael PorterWhat is Strategy?(Harvard Business Review, Nov/Dec96 Vol 74, Issue 6)

Operational Effectiveness Different from Strategy

Performing similar activities better than rivals, beingefficient

Leads to butnot sufficient to achieve superior

profitability

Benchmarking leads to companies looking more andmore alike and diluting the impact of OE


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Being different deliberately choosing a different set

of activities to deliver a unique mix of value

Value

=

The Price One Pays

minus What One Gets


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What makes Burger King

Different?


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What makes Chick-fil-A

Different?


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Strategy requires Fit - Combining activities that are:

Complimentary and Consistent with the overall strategy

Wal-Martlow cost / supply chain emphasis

McDonaldsbreakfast capability with given equipment

Cracker Barrel Restaurant and Gift Shop

Reinforcing

CVS brick and mortar stores and Caremark

Google and YouTube


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Strategy requires Tradeoffs More of one

thing results in less of another


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Southwest Airlines

Describe the strategy

Describe the tradeoffs


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Strategy is not static, it is

dynamic

Internal Factors Change (minor) Personnel (training, experience, culture, processes, etc.)

Facilities (capacity, location, efficiencies)

Finances (working capital, leverage, sources of funds) Unplanned events

External Factors Change (major) Suppliers

Customers Competitors

Legal / Regulatory


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Strategy over-simplified

Being Different

Making things Fit

Choosing Tradeoffs


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What Is Strategic

Management?

The ongoing process companies use to form

a vision and mission, analyze their internal

and external environment, select one or more

strategies, then develop and implement

tactical plans that create value for all

stakeholders (customers, shareholders,

employees, community, etc.)


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Components of Strategic

Management

External Analysis

Formulate the Mission(Vision, Core Values, G&Os)

Internal Analysis

Formulate the Strategy

Implement the Strategy

Evaluate the Strategy

SWOT Analysis


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ASSIGNMENT

1. Select your team of two to four students

2. Working with your partners, select two

struggling firms

Select firms you would enjoy researching

and

For which information is readily available

Documents

1 - Policy & Strategy Defined(2)