Business Policy

&

Strategic Management

SSD – SBM - 1. 1
Excz 1 : Dimensions of a Business

What really is a “Business”?

What does it constitute of ?

SSD – SBM - 1. 2
 What really is a “Business”?

 Is it Production? .. TML
 Is it Advertising & Marketing? .. Lintas
 Is it Distribution? .. DHL
 Is it raising & managing money? .. HDFC
 Is it a set of skilled people? .. Infosys

SSD – SBM - 1. 3
 Essence of a Business

At it’s very core , a Business is a set of

Processes which earn a profit
by identifying & retaining customers through
satisfaction of their needs on an ongoing
basis.

SSD – SBM - 1. 4
 Main Elements of a Business

A Profit oriented entity doing :

 Procurement of RM n components / Skill sets ( Operations )

 Conversion into Goods or Services ( Production )
 Getting Goods to reach consumers ( Distribution)
 Satisfying market needs on an ongoing basis ( Innovation )
(Thru Managing people , processes , finances , systems ,
technology , etc )

SSD – SBM - 1. 5
Excz 2 : Dimensions of a Business

What really is the key element of a

“Successful Business”? (say eg for being the market – leader)

What is that ONE Thing that a Market

Leader
must do most of the time?

SSD – SBM - 1. 6
 Key Element of a Successful Biz

To be successful & to remain a leader ,

a Business must win against the competition
most of the time by acquiring & retaining
customers through superior product or service
experiences & management skills , on an
ongoing basis.

Therefore , it needs to practice high quality..

SSD – SBM - 1. 7
Global Equivalents for SBM

Corporate Strategy
Strategic Management
Business Policy
Organizational Policy

SSD – SBM - 1. 8
SBM / BPSM :Broad Learning Objectives

 Understanding What Corporate Strategy is

 Significance of Strategic Decisions
 Analysis & Planning involved in Strategy
 Formulation & Implementation of Strategy
 Frameworks & Models used in SBM / BPSM
 Role of Managers in SBM / BPSM process

SSD – SBM - 1. 9
 Managing a Corporation
Biggest challenge is how to ‘Manage Change’

 Managing Business is = Managing Market Dynamics

 Constant flux in the market thru several influencers
 Situation compounded by Organizational Change
 Organizational Change is driven by complex factors
 Both external + internal change needs Managing
 Possible thru Strategic Planning & thru
‘ Management of Change’
Both require strong orientation towards S B M

SSD – SBM - 1. 13
 Defining Corporate Strategy

Strategy is the moulding of direction and

scope of an organization over the long term,
designed in such a way so as to deliver competitive
advantage to the said organization, by utilizing
resources & skillsets dynamically in a changing
environment and thereby , meet market needs &
fulfill stakeholder expectations.

SSD – SBM - 1. 21
 Common Examples of Strategy

 Marketing Strategy  5 Bowler Strategy

 Funding Strategy  Net Rushing Strategy
 Recruitment Strategy  2 Pit-Stop Strategy
 Positioning Strategy  Incitement Strategy
 Advertising Strategy  Lightweight Strategy
 Recovery Strategy  Military Strategy

SSD – SBM - 1. 22
 Is all that really Strategy?

Strategy v/s Tactics

 Developing all-rounders => Strategy

Sending Irfan Pathan at # 3 is Tactics
 Beefing up Infantry on the Desert Borders But
Attacking via Water Borders => Strategy
Deploying Submarines / Frigates is Tactics
 Mittal Steel (before Arcelor) acquiring a string of
ailing steel plants => Strategy
Systematically cutting costs (there)requires Tactics

SSD – SBM - 1. 23
 Imp Dimensions of Strategy

 Mostly about the Long-Term actions

 Molded by Overall purpose & Mission of the
Orgnzn
 Should lead to Competitive Advantage
 Should help win market battles against competition
 Must be backed by Resources & Skill-Sets
 Operations (Tactics) must align with Strategy
 Must adapt to Environmental Influences
 Must help to deliver on various expectations

SSD – SBM - 1. 24
 Quick Quiz on Strategy

What is an ‘accretive acquisition’?

Extra earnings that result from an acquisition of a
more profitable business [than the acquirer’s] and
thus, add to the profitability rate of the acquiring co
Opposite: Dilutive Acquisition:
What is ‘blue sky thinking’?
New [or different] & sometimes radical ways
of looking at & solving business problems.

SSD – SBM - 1. 25
 3 Levels of Strategy

L1 : Corporate Strategy :

 Overall purpose & scope / Orgnzn’s Mission

eg Which Businesses / Diversification / Acquisitions
 Financing & Structural Shape of Business
 Resource allocation to various divisions
 Key Foundation of every other strategy
eg RIL’s decision to enter the Telecom Business (RIM)

SSD – SBM - 1. 26
 3 Levels of Strategy
L2 : Business Unit Strategy:

Concept of SBUs
(Distinct Market for it’s Goods / Services)
 Competing in a particular , identified market
 Focus is on Differentiation / Competing & Winning
 Customer / Market Focused Strategy
 Potential clash with Corp Strategy eg in Retailing
Eg RIM’s decision to apply for only 13 Licences initially

SSD – SBM - 1. 27
 3 Levels of Strategy

L3 : Operational Strategy :

 Putting together Strategic Architecture

 Comprising of resources, processes, skills, etc.
 Facilitating, Practicing & Delivering on L1 & L2
 Seamless Integration of all levels is important
eg RIM’s high impact promotion ‘Monsoon Hungama’

SSD – SBM - 1. 28