Strategic Management

Strategic Management: Business Policy and Business Strategy
by: pinoypartnership

Strategy and Policy

Strategy

An external orientation that the firm’s management should practice staying competitive in the industry or sector it belongs

Policy

Internal matters that guide the operation of the business organization

Business Policy and Business Strategy

Business policies are a set of rules that guides the decisions and actions of the members of the organization or company

Business Strategies refers to the top management’s plan and tactics to achieve the organization’s mission and goals with consistency

The Paradigm Shift of Strategic Management

Source: https://www.citeman.com/11768-evolution-of-business-policy-course.html

First Phase: 

Paradigm of Ad Hoc Policy (till the mid 1930s): AD Hoc policy (generally single solution to a single plan) making necessitated by the expansion of American firms in terms of product markets and customers and the consequent need to replace informal controls and coordination by farming functional policies to guide managers.

Second Phase:

The paradigm of planned Policy (1930s – 1940s): Replacement of Ad Hoc policymaking by planned policy formulation and shifting attention towards the integration of functional areas, in line with environmental requirements.

Third Phase:

Strategy Paradigm ( 1960s): Rapid force of environmental changes and the increasing complexity of managerial functions demanding a critical look at the concept of business in relation to its environment hence the need for strategic decisions.

Fourth Phase

The paradigm of Strategic Management (1980s): shifting of focus to the strategic management process and the responsibility of general management in resolving strategic issues.

3 Comprehensive points of Strategy

1. Strategy Formulation
2. Strategy Implementation
3. Strategic Control

Strategy Formulation - this is where you need to design certain plans or tactics that will lead to achieving the goals and objectives of the organization with consistency.

Strategy Implementation - this refers to the implementation of the designed plans. It will now become a guide or norms to all members of the organization and might consider also as a protocol of the company.

Strategic Control - this means that after implementing the said strategy, proper monitoring of its outcome will now be the new concern of the organization. This will give them the opportunity to improve the previously implemented strategy into a much better one.

2 Categories of Strategy

Intended

Refers to the original strategy that management plans and intends to implement

Realized

Refers to the actual and eventual strategy that the management actually implements

Analytical Tools for Business Analysis

1. SWOT Analysis
2. PEST Analysis
3. MOST Analysis
4. Heptalysis
5. MoSCoW
6. SCRS Analysis
7. VPEC-T Analysis

   SWOT Analysis

A SWOT analysis is defined as a set of methods used to examine both internal and external factors that affect the performance of a company.

S-trengths

W-eaknesses

O-pportunities

T-hreats

PEST Analysis

PEST Analysis, stands for Political, Economic, Sociological, and Technological aspects of the Business/Company. This method is used to analyze the outside impacts on the performance of any enterprise.

MOST Analysis

This method is suitable for any company looking for performing internal analysis since it helps the owners sure that they are on the right pattern. 

M-ission

O-bjectives

S-trategy

T-actics

Heptalysis

This is a model that studies the important factors of a business venture at the beginning of assessment process. This analysis is completed by analyzing 7 fundamental elements which are; market opportunity, product or solution, execution plan, financial engine, human capital, potential return, and margin of safety.

MoSCoW

A business often chooses this analytical tool when they have numerous tasks to handle and they need to decide which task will receive priority. By listing the tasks and analyzing them, business owners can quickly make decision-based on the validity of requirements for each task. There are 4 factors in this analytical tool, which are:

Must have,

Should have,

Could have,

and Won’t have.

SCRS analysis

Using this method, it means that the company will follow the order of the current state and requirements from a business strategy to look for suitable solutions. The name of the tool is also an acronym for four steps respectively:

Strategy,

Current state,

Requirements,

and Solution.

VPEC-T analysis

This analysis allows users to make a decision when they have to examine different expectations from several opinions about a system. The name of this tool stands for 

Values, - This step requires all members to present their opinions about goals, beliefs, and current problems no matter they belong to human resources or capital resources, tangible or intangible issues. 

Policies, - This factor indicates the scale in which manners cab be performed.
Events - this step points out a chain of activities.
Content - suitable and meaningful and

Trust. - making all participants have the same belief will make your business more successful.