Business Policy and Strategy Lecture-03

Recap Nature of Business Strategy Importance of strategic planning- Strategic Tools Globalization Benefits Ecommerce Advantages

Today’s Lecture Important Terminologies in Business strategy and policy Vision & Mission Comparison of vision and mission Long Term Objectives Strategies Policies Strategists

Importance Terminologies Adapting to change Continuous monitoring of internal and external factors Timely Decision Incremental rise in degree of change 1. Technology 2. E-commerce 3. Merger-mania Example: Laser surgery, War on terrorism, economic recession, technology advancement

Importance Terminologies Strategists The main decision takers chief executive officer, president, owner, chair of the board, executive director, chancellor, dean, or entrepreneur Design strategies Responsible for success or failure of venture Differ from organization to organization Philosophy, attitudes, values, ethics, willingness to take risks, concern for social responsibility, concern for profitability, concern for short-run, versus long-run aims and management style

Strategists Strategists helps an organization: To gather, analyze, and organize information Track industry and competitive trends Develop forecasting models and situation analyses Evaluate corporate and divisional performance Spot emerging market opportunities identify business threats develop creative action plans

Who is Strategist? Any manager who has responsibility for a unit or division, responsibility for profit and loss outcomes, or direct authority over a major piece of the business is a strategic manager

Important Terminologies Vision Statement What do we want to become? Vision includes the basic concept of what the organization is all about—its purpose for being Concentrates on the future First step in strategic planning Our [Amazon's] vision is to be earth's most customer centric company; to build a place where people can come to find and discover anything they might want to buy online." Amazon's

Important Terminologies Mission Statement A Mission statement talks about HOW you will get to where you want to be. Defines the purpose and primary objectives related to your customer needs and team values It answers the question, “What do we do? What makes us different” A mission statement talks about the present leading to its future. “To inspire and empower people affected by cancer” Lifestrong

COMPARISION Mission Statement Vision Statement A Mission statement talks about HOW you will get to where you want to be. A Vision statement outlines WHERE you want to be. It answers the question, “What do we do? What makes us different” It answers the question, “Where do we aim to be?” A mission statement talks about the present leading to its future. A vision statement talks about your future. Your mission statement may change, but it should still tie back to your core values, customer needs and vision. Your vision should remain intact, even if the market changes dramatically, because it speaks to what you represent, not just what you do. It lists the broad goals for which the organization is formed. It lists where you see yourself some years from now. 

Important Terminologies SWOT Analysis S: Strength W: Weaknesses Strengths and weaknesses are determined relative to competitors Management, marketing, finance/accounting, production/operations, research and development, and computer information systems O: Opportunities T: Threats Economic, social, cultural, environnemental, political, legal, governmental, technological, and competitive trends Opportunities and threats are largely beyond the control of a single organization

Important Terminologies Objectives can be defined as specific results that an organization seeks to achieve in pursuing its basic mission Long-term objectives represent the results expected from pursuing certain strategies. Strategies represent the actions to be taken to accomplish long-term objectives. Strategies are the means by which long-term objectives will be achieved Annual objectives are short-term milestones that organizations must achieve to reach long-term objectives Policies are the means by which annual objectives will be achieved

Summary Important Terminologies in Business strategy and policy Vision & Mission Comparison of vision and mission Long Term Objectives Strategies Policies Strategists

Next Lecture Intuition and analysis Benefit of Strategic Planning Pillars of intuition Benefits of intuition in decision making Benefit of Strategic Planning