NOTES in Business Policy and Strategy Management Process

 Analysis
20% - Homework / Case Analysis o Strategic goals (vision, mission, strategic
20% - Quizzes objectives)
20% - Recitation & Participation o Internal and external environment
40% - Exams  Decisions
o What industries should we compete in?
Strategy o How should we compete?
- It is a plan of action or policy  Actions
- Made to gain or at least attempting an o Allocate necessary resources
advantage over competitors o Design the org to bring indended
strategies to reality
Strategic Management (ADA)
- Analysis, decisions, and actions TO CREATE AND Vision – evokes powerful and compelling mental images
SUSTAIN COMPETITIVE ADVANTAGES of a shared future
- Pattern in a stream of actions or decisions
(Mitzberg) Mission – org’s current purpose, basis of competition
and competitive advantage
Types of Strategy
1. Plan – deliberately chosen course of action Objectives – operationalize the mission statement with
2. Ploy – to mislead or distract a key player, such as separate yardsticks
a business competitor
3. Pattern – takes us to result of plans that turn External Factors *PESTEL
into action, and decisions that having some 1. Politics
result or impact. 2. Economy
4. Position – the location of the organization in its 3. Social
environment. This may be a geographic 4. Technology
intention of expanding internationally, or the 5. Ethics
position of a business in a particular industry. 6. Law / Legal
5. Perspective – strategy may be a perspective in
the genre of a persistent mindset regarding the Internal Factors
world in which the organization operates. This 1. Resources
worldview shows the intentions and/or actions 2. Capability
of members, as individuals bound by common 3. Distinctive competencies
thinking and behaving.
Strategy Formulation
Challenges • Functional (HR, Manufacturing, Marketing)
In Short Term Goals
• Business (Cost, Focus, Differentiation)
1. Key stakeholders
2. Changing landscape • Corporate (Diversification, Restructuring)
3. Quarterly performance
4. Diverse workforce Decisions
1. Investment Decisions
In Long Term Goals 2. Commitment of resources
1. Profitability 3. Operational synergies
2. Network 4. Recognizing viable opportunities
3. Long term planning
4. Cohesive organization
Actions
- Implements the formulated strategy
o Proper strategic control systems
o Appropriate organizational design
o Coordinates activities with suppliers,
customers, alliance partners
o Leadership ensures org commitment to
excellence and ethical behavior
o Promotes learning and continuous
improvement
o Acts entrepreneurially in creating new
opportunity
Intended vs. Realized Strategy
Intended
 Decisions only determined by analysis
 Intended strategy rarely survives in its original
form
Realized
 Decisions are determined by both analysis and
unforeseen environmental developments,
unanticipated resource constraints, or changes
in managerial preferences.

Competitive advantage – ability to create more economic

value than the competitors

Competitive parity – defensive strategy that helps a

business protect its brand or product’s competitive
position in the marketplace without overspending. Also
called defensive budgeting (cutthroat scheme)

Competitive disadvantage
1. People may have an aversion or dislike to the
firm’s offering
2. A firm may have outdated technology /
equipment
3. A firm may have a cost disadvantage
4. The firm may have a negative reputation

Two types of Difference

1. Preference for the firm’s output
a. People choose the firm’s output over
others
b. People are willing to pay a premium
2. Cost advantage vis-à-vis competitors
a. Lower costs of production / distribution

What is ambidexterity / ambidextrous?

- Focusing on short-term efficiency while also
focusing on long term effectiveness
-
- Aligning resources to take advantage of existing
product markets while also expanding product-
market scope by proactively exploring new
opportunities