BUSINESS POLICY
AND
STRATEGIC
MANAGEMENT
B. HIRIYAPPA, PHD.
Assistant Professor
Government First Grade
College
Thirthahalli(Bangalore)
PREFACE
Strategic management is a stream of decisions and actions with view to
develop effective long term and short term planning and policies with
technological business forecasting that would help the organization
achieve its superior goal. Strategic management includes strategic
analysis, strategy formulation strategic choice, and strategy
implementation and control strategic decisions for an organization
might to be to deploy resources into new opportunities.
In writing this book I have drawn on a vast amount of literature in
strategic management. Naturally, I owe an intellectual debt to numerous
authors who have enriched the stream of literature in strategic
management by their contributions. My prefounded debt is to American
scholars to George Stenier, Ansoff, Newman, Warren, Peter Drucker,
Akcoff, Christenson, Kenneth, Bower and Vacil, Acherman, Robinson,
Piere, Wheeler and Hunger, Porter, Charles W.L.Hill and Gareth R.Jones.
In the UK I owe a great debt to Argeni, Hussey, and Barnard Taylor,
Thomson and other scholars
Bangalore
B.HIRIYAPPA. Ph. D.,
CONTENTS OF THE BOOK
CHAPTER 1 DILEMMA OF BUSINESS � Dilemma of business 15
� Traditional Definition of business 17
� Motives of business 19
� Innovative Characteristics of business 20
� Branches of business 21
� Kinds of industry 21
� Creative Objectives of a business 22
� Long term objectives of a Firm 27
� Expert opinion of Business policy 28
� Need of business policy 30
� Different types of business policy 31
CHAPTER 2 BUSINESS STRATEGY AND CORPORATE
STRATEGY � Introduction 41
� Means and Ends of Business 42
� Dilemma of strategy and structure of Strategy 47
� Dilemma of corporate strategy 48
� Concept of strategy 48
� Characteristics of corporate strategy 50
CHAPTER 3 INTERNAL ENVIRONMENT ANALYSIS � Internal Environmental analysis 52
� Environment influence on SWOT 53
� Components of business environment 54
� Relationship between organization and its environment 55
� Internal analysis of the organization / company 57
� The value of systematic internal assessment 58
� Steps/process in the development of a organizational / company
profile 59
� Identification of strategic factors 59
� Functional approach 59
� The value chain approach 64
� Primary activities 64
� Identifying support activities 65
� Using value chain in internal analysis 68
� Evolution of strategic internal factors 68
� Stages in product / market evolution or product life cycle 69
� Quantitative versus qualitative approaches in evaluating internal
factors of the organization 70
CHAPTER 4 MICRO AND MACRO ENVIRONMENT ANALYSIS � Introduction 72
� Environmental scanning 73
� Micro / operating environment 73
� Suppliers 75
� Customers 75
� Competitors 76
� Marketing intermediaries 77
� Publics 77
� Organization 77
� Market 78
� Macro / remote environment 79
� Economic environment 80
� Political - legal environment 82
� Socio –cultural environment 84
� Demographic environment 85
� Natural environment 88
� Technological environment 89
� Global environment 92
� Why do companies go global? 95
� Strategic response to the environment 100
� Competitive environment 101
CHAPTER 5 FRAMEWORK AND SCOPE OF STRATEGIC
MANAGEMENT � Introduction 105
� Meaning of strategic management 105
� Framework of strategic management 107
� Importance of strategic management 108
� Characteristic/nature of strategic planning 109
� Scope of strategic management 110
� Dimensions of strategic decisions 112
� Tasks in strategic management 114
� Strategic management model 115
� Levels at which strategy operates / strategic 117
� Levels in organization 117
� Role of mangers at various levels 117
� Corporate level 118
� Business level 119
� Functional level 119
� Characteristic of strategic management decisions at different levels
119
� Benefits of strategic management 121
� Risks of strategic management 122
� Strategic management process / steps 122
� Components of strategic management 123
� Tasks in strategic management 129
CHAPTER 6 DEVELOPMENT OF VISION AND MISSION � Introduction 130
� Some fundamental questions related to related to mission & vision
130
� The vision 130
� Elements of a strategy vision 132
� Development of strategic vision 133
� Mission 133
� The need for explicit mission of organization 134
� Fundamental elements of mission 135
� Components of mission statement 135
� What is our mission? And what business are we in? 136
� Defining organization mission 136
CHAPTER 7 NATURE AND SCOPE OF CORPORATE STRATEGY � Introduction 139
� Corporate strategy 139
� Nature, scope and concerns of corporate strategy 139
� The stages of corporate strategy formulation implementation process
144
� A need for long term and short term objectives 148
� Qualities of long term objectives 150
CHAPTER 8 FRAMEWORK OF STRATEGIC ANALYSIS
� Introduction 159
� Strategic analysis 159
� Issues to consider for strategic analyses 161
� Situational analysis 163
� Framework of strategic analysis 167
� The methods of industry and competitive analysis 168
� The concept of strategic groups 173
� Swot analysis 178
� Significance of swot analysis 180
CHAPTER 9 GENERIC STRATEGIES � Introduction 185
� Strategic alternatives 185
� Michael porter’s generic strategies 185
� Cost leadership strategies 187
� Advantages of cost leadership strategy 188
� Strategic choices 188
� Disadvantages of cost leadership strategy 189
� Advantages of differentiation strategy 190
� Disadvantages of differentiation strategy 191
� Focus strategy 192
� Advantages of focus strategy 193
� Disadvantages of focus strategy 193
� Strategic choices of focus strategy 194
� Generic strategies comparative skills and resource requirement 194
� Best cost provider strategy 196
� Distinctive features of the generic competitive strategies 197
CHAPTER 10 FORMULATION OF FUNCTIONAL
DEPARTMENTAL STRATEGY
� Introduction 200
� Reasons for functional strategies are needed to firms 201
� Marketing strategy formulation 202
� Developing the marketing mix 205
� Marketing strategy techniques 210
� Financial strategy formulation 214
� Production strategy formulation 222
� Research and development strategies 225
� Human resource strategies formulation 229
CHAPTER 11 GRAND STRATEGIES STRUCTURES IN
ENTERPRISES
� Grand strategies / directional strategies 239
� Features of grand strategies 241
� Characteristics and scope of various grand strategies 242
� Stability strategy 242
� Characteristics of stability strategy 242
� Expansion strategy 243
� Characteristics of expansion strategy 243
� Retrenchment/ divestment strategy 246
� Characteristics of retrenchment/ divestment strategy 246
� Combination strategy 246
� Major reasons for organizations adopting different grand strategies
247
CHAPTER 12 DIVERSIFICATION STRATEGIES FOR
ENTERPRISES � Introduction 250
� Diversification 250
� Types of diversification 250
� Related diversification 251
� Unrelated diversification 251
� Internal diversification 252
� External diversification 252
� Horizontal diversification 252
� Vertical diversification 252
� Active diversification 252
� Passive diversification 252
� Concentric diversification 256
� Conglomerate diversification 257
CHAPTER 13 TURNAROUND, RETRENCHMENT DIVESTMENT,
AND LIQUIDATION STRATEGIES FOR ENTERPRISES � Introduction 260
� Turnaround strategy 260
� The causes of corporate decline 261
� Main elements of successful turnaround strategies 264
� Issues for successful turnaround strategies 266
� Contribution elements for turnaround in firm’s 266
� Divestment/cutback strategy 267
� Reasons to adopt divestment strategy in firms 267
� Liquidation strategies 268
� Liquidation – the strategy of last resort 268
� End game strategies 269
CHAPTER 14 TOWS MATRIX ANALYSIS, BCG MATRIX,
ANSOFF’S MATRIX, ADL MATRIX, THE GENERAL ELECTRIC
MODEL
� Introduction 270
� Tows matrix 270
� Portfolio analysis 271
� Advantage of portfolio analysis 272
� Strategic business units 272
� Characteristics of SBUs 273
� Advantages of SBUs organizational structure 273
� Disadvantages of strategic business unit organizational 273
� Stages in product / market evolution or product life cycle 274
� Advantage of product life cycle 275
� BCG matrix 276
� Mission of BCG 276
� Available strategies to pursue 278
� Limitations of the BCG matrix 279
� ANSOFF’s product - market growth matrix 280
� ADL matrix 283
� The general electric model 285
CHAPTER 15 PORTER’S FIVE FORCES MODEL AND
MCKINSEY’S 7’S FRAMEWORK
� Introduction 287
� Competitive advantage 287
� Five force model 287
� Potential competitors 289
� Rivalry among established companies 290
� The bargaining power of suppliers 293
� The bargaining power of buyers 293
� The threat of substitute products 294
� Mckinsey’s 7’s framework 295
CHAPTER 16 VALUE CHAIN CONCEPT ANALYSIS � Introduction 298
� The value chain 298
� Basic concepts of value chain 298
� The value creation process 299
� Primary activities 300
� Supporting activities 300
� Achieving superior efficiency 305
� Economies of scale 305
� Flexible manufacturing efficiency 306
� Materials management efficiency 306
� R&D strategy and efficiency 307
� Human resource strategy and efficiency 307
� Infrastructure and efficiency 307
� Superior quality 308
� The TQM concept 308
� Implementing TQM 309
� Superior innovation 310
� Building competitive steps in innovation - customer responsiveness
311
CHAPTER 17 VERTICAL INTEGRATION AND STRATEGIC
ALLIANCES � Introduction 316
� Vertical integration 316
� Upstream/backward integration 317
� Downstream/forward integration 317
� Creating value through vertical integration 318
� Disadvantages of vertical integration 320
� Strategic alliances 321
� Short term contracts and competitive bidding 321
� Building long term 322
CHAPTER 18 ACQUISITIONS AND JOINT VENTURES
� Introduction 324
� Acquisitions and versus internal new venture as entry strategy 324
� Failure of acquisitions 326
� Guidelines for successful acquisition 327
� Advantages of acquisition strategy 328
� Disadvantages of acquisition strategy 329
� Pitfalls of internal new venture 329
� Joint venture 331
� Advantages of joint venture strategy 332
� Disadvantages of joint venture strategy 332
� Life cycle of joint venture 333
� Joint venture as a entry strategy 336
� Drawback of joint ventures arrangements 336
CHAPTER 19 TAILORING STRATEGY ANALYSIS � Introduction 337
� Companies competing in emerging industries of the future 337
� Companies competing in turbulent, high velocity markets 340
� Companies competing in mature, slow growth industries 343
� Companies competing in stagnant or declining strategies 347
� Companies competing in fragmented industries 349
� Companies in competitively weak positions 352
CHAPTER 20 STRATEGY FOR FRAGMENTED INDUSTRIES � Introduction 358
� Strategy in fragmented industries 358
� Chaining 359
� Franchising 360
� Horizontal merger 360
� Strategy in embryonic and growth industries 360
� Strategy in mature industries 362
� Strategies to manage rivalry immature industries 365
� Price signaling 365
� Price leadership 366
� Non price competition 366
� Capacity control 367
� Focus causing excess capacity 368
� Choosing a capacity control strategy in mature industries 368
� Supply and distribution strategy in mature industries 369
� Strategy in declining industry 370
� Strategy selection in a declining industry 379
CHAPTER 21 STRATEGIC CHANGE MANAGEMENT
� Introduction 372
� Nature of strategic management change 372
� Organizational politics and power 375
� Source of organizational politics 375
� Power 377
� Source of power 377
� Organizational conflict 379
� Process of the organizational conflict 381
� Managing conflict strategically 382
� Conflict resolution strategies 383
� Implementing strategic change steps in change process 383
CHAPTER 22 STRATEGIES FOR COMPETING IN
GLOBLIZING MARKETS
� Introduction 386
� Globalization market 386
� Reasons for globalization 387
� Advantages of globalization 387
� Disadvantages of globalization 388
� Why companies expand into foreign markets 388
� The difference between competing internationally and competing
globally 389
� Cross country differences in cultural, demographic and market
conditions 390
� Multi-global /global country competition 391
� Strategy options for entering and competing in foreign markets 391
� Difference between multicountry strategy and global strategy 396
� Pursuing competitive advantage by competing globally 398
� Strategic alliance and joint venture with foreign country partners 400
� Competing in emerging foreign markets 401
� Strategies for local companies in emerging markets 401
CHAPTER 23 CORPORATE CULTURE AND LEADERSHIP
� Introduction 403
� Concept of corporate culture 403
� Corporate culture 404
� Contents of corporate culture 405
� Strength of corporate culture 406
� Strong culture companies 406
� Weak culture companies 407
� Unhealthy cultures 407
� Adaptive culture 408
� Thickness culture 408
� Extent of sharing 408
� Clarity of ordering culture 408
� Deciphering culture 409
� How culture influences 409
� Building ethics into the culture 410
� Strategic leadership 411
� The role of the CEO 413
� Key considerations in managerial assignment to implement strategy
413
� Managerial assignment situations 414
CHAPTER 24 STRATEGIC CONTROL SYSTEMS
� Introduction 416
� Establishing strategic controls 416
� Strategic control systems 416
� Characteristics of strategic control systems 416
� Steps/process in designing an effective control system 417
� Levels of control 418
� Types strategic control 418
� Premise 419
� Implementation 420
� Strategic surveillance 421
� Special alert control 421
� Market 421
� Output control 422
� Operational control systems 422
� Types of operational control systems 422
� Strategic reward systems 424
CHAPTER 25 MATCHING STRUCTURE AND CONTROL
ANALYSIS � Introduction 426
� Matching structure and control analysis at the functional level,
business level 426
� Global structure 430
� Multidomestic strategy and structure
� International strategy and structure 429
� Global organizational structure 430
� Matching structure control at corporate level 437
CHAPTER 26 STRATEGY IMPLEMENTATION AND CONTROL � Introduction 439
� Interrelationships between strategy formulation and implementation
439
� Basic elements in Strategic management 440
� Strategy formulation and implementation matrix 442
� Contrast between strategy formulation and implementation 445
� Issues in Strategy implementation 447
CHAPTER 27 BUSINESS PROCESS REENGINEERING AND
BENCHMARKING � BPR 453
� Different forms of Business Process 457
� Key elements in BPR 460
� Rationale BPR 461
� BPR approach 463
� Steps in BPR 463
� Problems of BPR 467
� Benchmarking 469
� Benchmarking Process 472
CHAPTER 28 SIX SIGMA AND MANAGEMENT � What is Six Sigma? 472
� Focus Areas in Six Sigma 475
� Six Sigma Méthodologies 476
� What’s New About Six Sigma 479
� Importance of six sigma in organization 480
� Six Sigma Act as a System of Management 481
CHAPTER 29 CONTEMPORARY STRATEGIC ISSUES � Introduction 486
� Strategies for internet economy 486
� What is internet technology? 487
� Strategy shaping characteristics of the e-commerce environment 488
� Strategic management in non profit and government organization 490
� Educational institutions 491
� Medical organizations 491
� Governmental agencies and departments 492
Index
CHAPTER 1
DILEMMA OF BUSINESS
DILEMMA OF BUSINESS
Traditional business concept generally involves the buying and selling of
products and services which offered to ultimate customers. This concepts is
not suitable due to changes, fluctuations, innovations, inventions of new
market, new customers, new product and services, we can redefining of the
business concepts. Business managers are well equipped with e technology
to sell their companies products and services. They need the self awareness
of the work and self confidence to manage, admin, control and monitor the
sales proceeds in a several regions and several business segments.
New dimensions of business concept will be looking into e technology in
business through the net work marketing, without products and services and
enterprise advertise to business with just website and get orders from across
the world. An order would be executed on the basis of demand and supply
and ultimately shipping to customers. Sales manager would not see the
customer in spite of a manager get orders through internet marketing tools.
We believed that only buying and selling of goods and services meanwhile it
is happen in real scenario, it is totally change compare to old business
concepts. New business concepts are the output of innovations of
communication tools like as internet facilities. E commerce and e-
innovation result helpful to world economic forum that ready to contribution
to business and industry.
Globalization, liberalization and privatization are the major tools to business
growth, development, survival of the major multinational companies.
Multinational companies produce the goods and services in an economy of
scale, and get orders from across the world, in this way to take competitive
advantage; it is also one of the business strategies to enhance to business
activities.
Economic treaties will be added advantages to business cooperation from
one country to another country. Treaties are development of business along
with the good relationship with countries. It is also bring the new outlook to
business activities in this way to achieve the short term goals of business like
as profit maximization and long term goals like as wealth maximization.
Strategic alliances is the another form of business development tool to
multinational companies. Strategic alliances is entering to partnership to sell
the products and services of the partner firms who are entering business deals
with the new market and new enterprise in this way to dump their products
and services to entire world market and earn a maximum profit and share the
profit to their partner.
Business concepts are changing from time to time. It depends to business
environment and global environment. Intellectual capital will play very
dominant role in next century. Intellectual capital business is enhanced with
products and services. It will be control, manage, admin and effectively
achievement of means and ends.
Economic Turmoil and global recession will bring either ruin the business or
bring the new opportunities to business. We can redefine the business and its
policy of an enterprise. A Business Leader examines the real circumstances
which are coping with economic indicators of the state. Business
development managers are estimating the future demand and supply of
products and services which are offering to ultimate customers who are
located in different region. Economic turmoil vanish the confidence to
survival of the business and slowdown the demand of the products and
services. America, England, Japan, Germany, China. Japan and India are
failure to curb the economic turmoil and global recession due to failure to
application of appropriate strategy.
In this book, generally overlook to the core area of the business and its
policy towards the strategic goals and objectives. Business determines the
structure of an enterprise how that enterprise system supports; protect the
nature of business in this way to make the emerging business process in
terms of growth and development the business activities. Secondly the
tolerance management of strategy and its concepts towards an organization
in this way to how to manage and admin the different nature of activities
those are different from one strategic business unit to other strategic business
units. Thirdly, dynamic strategic competitive analysis in terms of
competitors, core competence and value chain analysis: it involved in terms
of internal environment and external environment that decides to primary
and secondary activities of business. Fourthly, the managing cost of business
that will be needed to business leader who are effectively implementation of
generic strategies and grand strategies in business, for these purpose,
strategic leader should overlook the strategic analysis, situation analysis and
strategic tools application in business to determine major and minor goals
and objectives of an enterprise. Fifthly, Strategist are in formulate of
business means and ends that way to implementation of functional level
strategy in a different business segment and to analysis to strengths and
weakness and opportunity and threat of an entity to know core competence
of the business activities and know how to over come the competitors in
different market and different segment. Finally, we will be involved the
implementation of means and ends with an appropriate manner and
accomplish strategic means and ends in different manner. In this book
indicates the recent changes in business and its scope to learn and manage in
a intellectual way to normalize business functions at a maximize the utility to
framework the business policy that will be helpful to develop strategy,
implement strategy and evaluate and control the strategy by applying the
strategic tools like as industrial analysis, situation analysis, competitor
analysis, value chain analysis, business environment analysis, tailoring
strategy which suitable to an enterprise and gain the competitive advantage.
TRADIATIONAL DEFINITION OF BUSINESS
The term ‘typically` refers to the development and processing of economic
values in society. Normally, the term is applied to portion of economic
activities whose primary purpose is to provide goods and services for society
in an effective manner. It is also applied to economics and commercial
activities of institutions which having other purposes.
Business principally comprises of an all profit seeking activities of
the organization which provide goods and services that are necessary to
economic system. It is the major economic pulse of a nation, striving to
increase society’s standard of living. Finally, profits are a primary
mechanism for motivating these activities.
Business is in any organization which makes distribution or provides
any article or service to the customers, who are belonging to members of
the society. Business may be satisfied customers needs for these purpose
customers are able and willing to pay for it.
Business may be defined as “the organized effort by individuals to
produce goods and services to sell these goods and services in a market place
and to reap some reward for this effort.”
Functionally, we may define business as “those human activities
which involves production or purchase of goods with the object of selling
them at a profit margin”. Issues of business as outlined:
� The term business refers to the state of being busy for an individual,
group, organization or society.
� It is also interpreted as one’s regular occupation or profession or
economic activities.
� It deals with particular entity, company, organization, enterprise,
firms or corporation.
� It also interpreted as particular market segment sector like computer
business and it included under term business.
� It is wide and willing to use different activities
� It consists of purchase, sale, manufacture, processing, marketing of
products, services like manufacturing, trading, transportation,
warehousing, banking and finance, insurance and advertising etc.
� It is clearly stated that all business activities main purpose is to earn
profit. Profit as a surplus of business and it accrues and distributed to
the owners of the business. Business has to pay wages to workers
who work in the business. People invests money in business due to
be getting retain. Retain is profit from the business. This is awarded
to investor because of they are taking the risk.
� Profit is the motive for the investor who serves and run business and
it is the stimulation effort of the business for growth, survival of
business.
� taking the risk.
� Profit is the motive for the investor who serves and run business and
it is the stimulation effort of the business for growth, survival of
business.
MOTIVE OF BUSINESS
Organizations are dividing into two parts: Part one is trading able and willing
to pay for it.
Business may be defined as “the organized effort by individuals to
produce goods and services to sell these goods and services in a market place
and to reap some reward for this effort.”
Functionally, we may define business as “those human activities
which involves production or purchase of goods with the object of selling
them at a profit margin”. Issues of business as outlined:
� The term business refers to the state of being busy for an individual,
group, organization or society.
� It is also interpreted as one’s regular occupation or profession or
economic activities.
� It deals with particular entity, company, organization, enterprise,
firms or corporation.
� It also interpreted as particular market segment sector like computer
business and it included under term business.
� It is wide and willing to use different activities
� It consists of purchase, sale, manufacture, processing, marketing of
products, services like manufacturing, trading, transportation,
warehousing, banking and finance, insurance and advertising etc.
It is clearly stated that all business activities main purpose is to earn profit.
Profit as a surplus of business and it accrues and distributed to the owners of
the business. Business has to pay wages to workers who work in the
business. People invests money in business due to be getting retain. Retain
is profit from the business. This is awarded to investor because of they are
organizations and Part two is Non Trading organizations. Trading
organizations main concepts is earning profit; it is main motive of business.
In other words, Non trading concern main concepts is rendering services to
society. We will know the main issues that are relating to profit, it is a main
motive of business:
� For every kind of business organization, profit is often regarded as
motive for the entrepreneurs and it measure the overall performance
of the business.
� Profit is the tool for measuring and evaluation of the business
efficiency and productivity at the managerial competence.
� It is helpful to strategic managers how to take well decisions and
actions which are turn into effective in the form of able to combine
and utilize the available resource and able to sustain the organization
with growth and survival of the business entity.
� Business managers who will take higher efficiency and risk and
certainly expect greater volume of the profit from the business entity.
� Business efficiency expressed in terms of percentage of profit to sales
volume, to capital employed, to market value of corporate shares.
� Outside investors eager to know the profit of the firm and to make
assessment about their commit funds and effective utilization of
funds will be in the business entity.
� Peter F Drucker has drawn some conclusions about what is a
business and what are useful from the business and how to
understand the term business. His conclusions that Business is
created and managed by the people a group of people who will be
taken decisions that will be determined whether an organization is
going to prosper or decline, whether it will survive or will eventually
perish. This conclusion is true in the business. And business cannot
explain in terms of profit.
INNOVATIVE CHARACTERISTICS OF BUSINESS
Business is to provide goods and service to the people. It provides
the public with the things, it needs and wants in order to survive,
enjoy life and improve in a material sense. From the point of view
of consumer, business is the satisfier of needs and desire of the
customer demands which should be provided by business.
Goods that have been produced or procured for sale in retain for
price enter the realm of business. This activity of selling results is
the creation of the wealth for the society. In satisfying demand,
business uses the resources of land, labor and capital. These
resources when taken separately have little value; but business
combines structures and refines the resources to produce to the
value of the society. Further, business employees’ who exchange
their talents for wages and salaries. Therefore, these people
exchange their compensation for the desired goods and service.
Business is profit-seeking activity. It supplies goods and services to
customers who are satisfy their demand and desire. It adds to
society’s value by earning of a profit. Profit is the biggest stimulus
for maintains the survival of the business and its future
development. Society has permits business to earn profit as a
reward for assuming the risks of operating a business.
Business is also an essential participant in society. For satisfying
society demand which supplying goods and services and earning
profits. Business involves the most fundamental activities of the
society. As a result, Society has looks to business for something
more than products, services and profits. It looks to business for
leadership and direction in helping to achieve society’s objectives.
It expects business to assist in the establishment of a better service
to the society.
BRANCHES OF BUSINESS
Business includes the total enterprise of the country. Business activity
has two branches. They are as follows:
Industry
Commerce
INDUSTRY
In broad sense, industry is the branch of business activity which
concerned with raising production, fabrication or possessing of goods and
services. In other words, industry is an activity concerned with conversion of
raw materials or semi finished goods into finished goods. Industry provides
two types of goods namely; Consumer goods and Industrial goods.
Consumer goods are those goods manufactured by industry for ultimate use
of a customer. For instance brush, Paste, cloth and food products etc.,
Industrial\Capital goods are those goods produced and used for further
production. For instance like machineries, tools and raw material etc.
KINDS OF INDUSTRY
Industry is further classified into five broad types. They are as listed
below:
1. Extractive industries
2. Genetic industries
3. Manufacturing industries
4. Construction industries
5. Territory \ Service industries
Extractive Industry
Extractive industry are those industries concerned with extraction of
wealth from surface of the earth, soil, forest, water, air etc, for instance
agriculture, mining etc.,
Genetic Industries
Genetic industries are those industries concerned with reproduction
and multiplication of plants animals for making profit on their sale. For
example, Nurseries, cattle building and poultry farming.
Manufacturing Industries
Manufacturing industries are engaged in the conversation and process of raw
material through separation, combination, and transformation into finished
goods. Such as machinery and plants of all types, iron and steel, sugar, paper,
cotton clothe, electrical appliances, zinc ore, paper pulp water power, etc.,
Construction Industries
Construction industries are concerned with the construction of roads,
railways, dams, canals, buildings, bridges etc. there are mainly concerned
with the manufacture of non-moveable items.
Territory or Service Industries
Service industry which produce intangible goods, those which cannot
be seen or touched included in this category are banking, transport,
insurance, communication and services of a professional nature such as
lawyers, doctors, dentists, management consultants, advertisers, chartered
accountants and engineers, etc.,
Commerce
Commerce has been defined as “the sum total of those processes
which are engaged in the removal of the hindrance of persons (trade), Place
(transport and insurance), and time (warehousing) in the exchange (banking)
of commodities”.
Trade
Trade means sale, transfer, or exchange of goods and services,
through certain ancillary functions like packing, warehousing, banking,
transportation, Insurance, and advertising. Trade may be as Domestic Trade
and International Trade.
CREATIVE OBJECTIVES OF A BUSINESS
Business Purpose
Business has some purpose. These purposes are listed below:
� It is to create customers.
� It is create customers for selling of their products and services.
� It is create market.
� Customers determine the main purpose of the business.
� Customers are the basic foundation of the business and keep its in
existence in the market.
� It is exists because of catering to material needs and requirement of
the society, individual persons, government institutions, company,
firms and enterprise.
� Business is run with in the purview of the legal and general public
interest.
� It is ultimate force of an economic expansion, growth and change.
In general sense, enterprises pursue multiple objectives rather than a one
objectives. Strategic manager has identified a set of main business
objectives. These pursued by a large cross–section of enterprises.
Profitability, productivity, efficiency, growth, technological, dynamism,
stability, self reliance, survival, competitive strength, customer services,
financial solvency, product quality, diversification, employee satisfaction
and welfare and so on are the major objectives of enterprise. Enterprise looks
for balance of these objectives in appropriate and suitable manner. Important
business objectives are listed below:
Figure 1.1 has identified the creative objectives of business as outlined:
� Survival
� Stability
� Growth
� Profitability
� Efficiency
Survival
� An organization mission statement reveals the organization’s
intention to secure its survival through development growth and
profitability of the business.
� It is will and continue the business concern into the future as long as
possible perpetuate anxiety, Strategic managers take more
responsibility for survival of the organization business.
Figure – 1.1: Creative Objectives of Business
� Therefore, Survival is an assumed goal of the business, if strategic
managers often neglected survival, its impact on strategic decisions
making for long term.
� It is basic and implied objectives of the most organizations.
� It will be gained more value and important during the stage of the
beginning of the business enterprise and during the general
economic adversity of business.
� The survival refers to the function of the nature of ownership, nature
of business competence of management, general and industry
conditions, financial strength of the business enterprise or any type
of business concern.
� All types of enterprises will be interested in more than mere
survival.
Stability
� Stability is one of the important objectives of the business enterprise.
� It will be cautious, conservative objective
� It is a least expensive and risky objectives in form of managerial
time and talent and other resources,
� A good and steady enterprise always minimizes its managerial
tensions and reduces its dynamic nature decisions which are taken
from managers.
Profitability
Stability
Growth
Efficiency Objectives of a
Business
Survival
� It is least resistance compare to other objectives and hostile to
external environment.
Growth
� An organization growth is closely associated with its survival
and profitability and equated with dynamism, vigor, promise,
and success.
� Growth refers to overall development of the organization
activities in terms of increase in assets, manufacturing
facilities, and increase in sales volume in existing or through
new product in this way improves profits and market share.
� Growth may be proactive change is a necessity for dynamic
business environment.
� Growth refers to in terms of expansion business, increase
manpower employment, diversification and acquisition of
business and create unknown risky paths in this way
organization looks for survival, profitability and growth of the
business activities.
Profitability
� Profitability is the vital goals of a business organization.
� Profit is the sole motive of the business enterprise.
� Private business enterprises are operated on behalf of the
owners and its benefits also goes to owners of the enterprise.
� Strategic managers should know how to measure profitability
or how to define profitability either the long term or short
term of the organization.
� Profitability clearly indicates of an organization’s ability to
satisfy the principal; claims and desires of employees and
stakeholder of the organization.
� Strategic mangers analyses, interpretations of profit of the
organization, how it impact on survival of the organization in
the future.
Efficiency
� Efficiency is one of objectives of the business.
� It helps to business to achieve goals and success of the
business
� Efficiency refers to best utilization of available and scarce
resources and brings the highest productivity in business
activities.
� It is useful operation objectives due to effective utilization of
economic version of the technical objectives which for
achieving productivity and designing suitable input and
convert into output for effective utilizing of funds, resources,
physical facilities and so on in enterprise.
LONG TERM OBJECTIVES OF A FIRM
Short run profit maximization is rarely based on the best approach to
achieving sustained corporate growth and profitability of the firm. It is
recognized by the strategic managers of the firm. Therefore, to achieve long
term prosperity purpose strategic managers designed long term objectives.
Long term objectives of the firm or company or organization as listed below:
� Profitability � Productivity
� Competitive position
� Employees development � Employee relationships
� Public responsibility
� Technological leadership
Profitability
Profitability is an important functional area of the long-term
objectives of the firm. The ability of any business is to operate in the long
run depends on attaining on acceptable level of profits. Strategically
managed firms characteristically have a profit objective usually expressed in
return on equity.
Productivity
Productivity is essential need for each strategist in the corporation.
Strategic managers try to improve the productivity of their systems.
Companies that can improve the input–output relationship normally increase
profitability. Productivity objectives are some times stated in terms of
desired decreases inmost. This is an equally effective way to increase
profitability.
Competitive Position
Competitive position can increases profitability and productivity of
the company. Companies or firms or organization’s Competitive position
reduces the cost of production of the output. The corporate success depends
on the firm’s competitive position. It is strongly dominated in the market.
Employee Development
It refers to experienced employees are the asset of the organization.
For long-term purposes, the company’s employees need training for further
course of action that effectively and efficiently managed to produce
productivity in the competitive position. Therefore, it is one of the major
long-term objectives of the organization.
Employee Relationships
All companies actively seek good employee committed relations
with organizational environment. Strategic manger should know the
employee needs and expectations. Strategic managers take a decision to
welfare programme for the employees of the companies. It is only can
improved of the employee’s relationship in the organization.
Technological Leadership
Technological leadership can gives clear picture of the organization goals
and objectives for the long term changes in the business scenario many
companies state their objectives in terms of their technological leadership.
Public Responsibility
Business recognizes their social responsibilities towards to customer and
society. Public responsibility is buildup long-term images in the society by
through providing social work to public.
EXPERTS OPINION Of BUSINESS POLICY
Business Policy According to Glueck
“Development from business policy arose from the use of planning
techniques by managers. Starting from day to day planning in earlier times,
managers tried to anticipate the future through preparation of budgets and
using control systems like capital budgeting and management by objectives.
With the inability of these techniques to adequately emphasize the role of the
future, long range planning came to be used. Soon, Long range planning was
replaced by strategic planning, and latter by strategic management: a term
that is currently used to describe the process of strategic decision making”.
Business Policy According To Christensen and Others
Business policy is “the study of the functions and responsibilities of senior
management, the crucial problems that affect success in the total enterprise,
and the decisions that determine the direction of the organization and shape
its future. The problems of the policy in business, like those of policy in
public affairs, have to do with the choice of purposes, the moulding of
organizational identity and character, the continuous definition of what needs
to be done, and the mobilization of resources for the attainment of goals in
the face of the competition or adverse circumstances”.
� It tends to focus on the rational analytical aspect of strategic
management.
� It presents a design framework for understanding for strategic
decision making.
� Strategic framework enables an individual to make preparations for
handling general management responsibility effectively and
efficiently.
� Business course introduced by the Harvard Business School and
origin of its business policy traced back to 1911.
� It is integrative course in management and aimed to the creation of
general management capability.
� This course was based on interactive case studies that had been use at
the school for instructional purposes since 1908.
� It intended to enhance general manager capability of students.
� The introduction of business policy is the curriculum of business
schools and management institutes came much later, in 1969.
� The American Assembly of Collegiate Schools of Business is a
regulatory body for business schools. It made that the course of
business policy is a mandatory requirement for the purpose of
recognition.
� This course spread to different management institutes across different
nations and become an integral part of management curriculum.
� It is considered as a capstone, and integrative course offered to
business students who have previously been through a set of core
functional area business course.
� The term ‘Business Policy ‘had been traditionally used in the
business schools in world which though new titles for the course have
begun to be introduced in recent years in India.
NEED OF BUSINESS POLICY
� They tend to serve as precedents and thus reduce the repetitive
rethinking of all the factors of individual decisions which they save
time.
� Policies aid in coordination, if a member of individuals are guided by
the same policies, they can predict more accurately the actions and
decisions of others.
� Policy provides the stability in the organization, a certainty of action
is assured even though the top management may any change. The
policies continue and this continuity promotes stability in the
organization and thus reduces frustrations of members.
� Clear policies encourage definite individual decisions. Each
functional manger has clearly understanding the range policy within
the organization which helpful to make decision and thus feel less
uncertain as to whether he\she can give answers to subordinates
without “getting into trouble”.
� Policies clearly specify routes towards the related goals of the
organization. Policies serve as a standard or measuring yard for
evaluation performance in the organization. The actual results can be
compared with the policies of the organization which is to determine
how well the members of an organization have lived into their
professed and intentioned to what extent goals have been achieved.
� Sound policies help to build up employee enthusiasm and loyalty for
the organization. This is specifically true when they reflect
established principles of fair play and justice and when they help
people to know that within an organization.
� They setup the pattern of behavior and permit to participants to plan
with a greater degree of confidence and lead to better co-operation in
the organization.
� Policies are monitored and controlling of the organization which
guides for delegated decision-making. They seek to ensure
consistency and uniformity in decisions relating to problems that
recur frequently and under similar. But not identical circumstances.
� Policies always with clarity, relevance and reasonableness and enable
a firm to make the optimum utilization of scarce available resources
and thereby bring about an efficient level of operations because
wastage must be avoided.
� Corporate policies always buildup an image of the business in the
eyes of the public and this brings in more reputation, goodwill; sale
and profits so that more and more acts of social responsibilities may
be undertaken by organization.
� Proper administration and implementation of policies that encourage
initiative in the employees so that they act with full responsibility
with in the framework of the policies of the organization. This
naturally improves the working environment like very good-labor
management relations within the organization.
DIFFERENT TYPES OF BUSINESS POLICY
Different types of business policy as follows:
� On the basis of level of management
� On the basis of functional areas
� On the basis of expression
� On the basis of nature of origin
� On the basis of scope of organization
� On the basis of nature of management function
ON THE BASIS OF LEVEL OF MANAGEMENT
Business policies are framed at different levels of the management, and
accordingly then may be classified as
Top Level Management Policies
These policies are derived from the top management for planning
and decision making. The top management principally comprises of the
Board of Directors, chairman /president, vice president/vice-chairman,
managing director, general manager etc, and the top management frames the
policies by themselves and it is, therefore, responsible for these. These
people are the ultimate level of authority in the operation of the enterprise.
The policy makers plan to set of the objectives, define the goals, establish the
policies, see that these policies are put into effect and judge the results.
The top management policies involves with the long range product
selection extent of its diversification, a acquisitions and mergers of two or
more units, spin-offs-their nature, extent and liability-sales forecasting sizing
the enterprise, process of selection, machine selection, determining site,
location and needs of the plant, decisions regarding investment of available
resources in capital and human research development, settlement of
problems of executives regarding their promotion, transfer, retirement etc.,
and accomplishment of the organization objectives/goals.
Middle Level Management Policies
These policies are the out-come of the deliberations of the executives at the
upper middle and middle level. The upper middle management consists of
the head of the personnel administration department like Production
manager, sales manager, marketing manager, financial manager, deputy
general manager and assistant manager etc, their executives are responsible
for research, finance, accounting and marketing etc,
They lay down the policies regarding upon the establishment of organization,
selection of the best-suited executives staff and employees to carry out the
plans, installation of proper departments, designing of operating policies and
operating routines, deciding processes, methods and techniques of
production which exploration of new markets and decisions about channels
of distribution for assignment of duties to each department and to each
individual, who are deciding about source of manpower, resources and their
selection, deciding about wage, salary and incentive plans for them, obtain
necessary finances, controlling costs and solving problems of actual sales
activities etc.,
Middle management consists of the deputy heads of the various sections
under different functional departments-employment and training, industrial
relations, labor welfare and social security. Junior executive, superintendents
of departments divisions etc., these executives are the deputy head of the
functional department like sales, production, research, Finance and
accounting divisions of the organization. They frame policies are known as
middle management polices.
Lower Level Management Policies
The lower level management people are men and women who have direct
supervision over the working force in office, factory, sales field, and other
areas of activity of the organization. They are directly related to the
accomplishment of the task for the small sub-divisions of the whole
enterprise. They chalk out policies or the assignment of the jobs to the best
suited persons in the organization. The lower level management policies
guidelines of the provision of adequate tools, raw materials, training of the
workers, issuing of orders, maintenance of quality, improving working
conditions, morale, maintaining discipline and controlling absenteeism etc.
Operating Force Policies
These are the rules or a code for doing the job which enriched to a particular
worker performance. These are usually written down in the notebooks of the
organization. Operating policies notice to the worker how long each job
work should take a time, what tricks of the trade are required, and what
quality feature are emphasized.
ON THE BASIS OF FUNCTIONAL AREAS
On the basis of functional areas business policies may be classified as
production policies, marketing and sales polices, financial policies and
human resource development policies.
Production Department Policies
Production policies are framed and concerned with the following
issues:
The product to be produced (product line, type of product)
The type of technology, processes, equipment and tools, to be
used
The selection of factory\office\plant site, location and layout.
The decisions regarding scale of production
Making of production budgets manufacturing costs and deciding
about total cost and cost of installation and its maintenance
The selecting of junior executives;
Inventory control
Collective bargaining and labor relations
Organization and co-ordination of their activities
Selection of systems of quality, cost production control.
Production policies are the basic determinants of the total policy
making procedure.
Marketing and Sales Department Policies
These policies relate to policies in market analysis, business law, display,
salesmanship and advertising etc, i.e. they are concerned with total process
of marketing which covering both ‘product mix’ and ‘market mix’. The
product mix includes decisions regarding the type, quantity and quality of
product design, contents shape, methods and techniques of production etc.
Market mix covers the issues like price, place, promotion, channels of
distribution, advertising policies, packaging and branding decisions,
consumer psychology and behavior and pricing of the product etc.
Since the modern concept of market has treated as ‘consumer as a
king’, every product is brought to satisfy customer needs. Hence its gamut is
very fast. The policies in this field, therefore, deal with the following issues:
Spotting out of the present and potential markets, the size and nature
of consumers.
The degree of competition in the market and how best could it be
met.
The location of prospects and persuading them to purchase.
Fixing price of product, offering rebated, discounts and other
concessions.
Compensating salesman adequately; and providing them with
training and developmental opportunities.
Selecting channels of distribution or employing representatives and
agents.
Dividing the total market into branch or dealer areas.
Establishing advertising policies like:
i. Setting up sales control policies.
ii. And establishing sales volume and expense budgets.
Financial Department Policies
Financial policies may be regarded as the most important business policies of
the organization. It depends on the entire success and failure of a business
unit of the organization. Properly and careful framed financial policies help
to effective utilization of the resource like men, machine, market, method,
materials and long term survival of the business while improper framed
financial policies are ruin to business activities of the organization.
Financial policies are essential to organization. They are as listed below:
To know the capital requirement of the organization in terms of
short, medium and long term-and know the how to
procurement and effective utilization of finance in the
organization.
The method of raising funds and the ratio between the various
types of sources of funds, particularly the proportion of owned
funds to borrowed funds.
Utilizations of the funds and the ratio between different types of
asset.
The credit policy, declaration and distribution of dividend to the
shareholder.
Profit policy, provisions for taxes, renovations and modernization
of plants and machinery.
Costing policy includes the policy for selecting the method of
costing, the method of allocating, apportioning, reapportioning and
absorbing overheads.
Accounting policy includes the following areas:
The basis of valuation of stock in trade at the year end;
whether at total cost, or at direct cost or at works costs.
The issue price of the raw material; whether to follow first
in first out method or last in first out method or average
cost or any other methods of issue of raw materials
Depreciation policy; whether straight line method or
reducing balance method or mileage method or any other
method.
The treatment of deferred revenue expenditure, intangible
asset, fictitious assets and preliminary expenses.
Capitalization of expenditure during construction period
The policy for provision of bad and doubtful debt,
investment losses, etc.
Human Resource Development Department Policy
Personal policy are concerned with human resource utilization, its
recruitments and selection, source of supply, training of employment,
training of the employees at whole cost; the promotion and transfer policy,
the issues regarding compensation to the employees, wage incentive and
other perks, benefits and services etc.
ON THE BASIS OF EXPRESSION
On the basis of expression policy may be classified into express
policies, oral policies and written policies
Express Policy
Express policies are those policies, which expressed in terms in clear
words either orally or in writing.
Oral Policies
Oral policies are those, which are issued or stated by the management
in terms of words of mouth to their subordinates. Such policies are generally
adopted when an organization is small and face-to-face communications is
desired. Since they are direct, they are more effective and, hence can be
bettering understood and implemented. They are more flexible and can be
adjusted to be different organizational conditions.
Limitation
First is the main drawback of such policies are not written as such.Second is
the interpreted in any way by the persons receiving them.Thirdly they are
often not remembered for long time and easily forgotten, especially when
there are number of policies and where their frequency of issues is great.
Therefore, usually oral policies are not in popular use.
Written Policy
Written policies are those, which are normally, pull in black and
white and stated in clear terms so that persons whom they are addressed to
easily understand them. For putting the policies in written, much care has to
be taken, for instance;
� Policy is always written in terms of words which neither
vague nor unnecessarily academic, nor in any way
offensive to those for whom it is meant.
� Words, sentence and paragraphs should be short and
statement of policy should be complete and precise.
� It should not contain irritating words are expression
antagonistic or cast as persons on others.
� The tone should be warm, without use of any legalistic
phraseology
� The frame should be convenient and handy for
management reference and application.
Written policies are desirable in the following situations:
� The subject matter on which a policy is to be formulated,
is of a very controversial nature
� The distance between the top and lower levels of
management is so wide as to make personnel/informal
contact and communications rather difficult.
� Consistent treatment all is needy and certainly of action
desired.
� Preciseness and complete understanding is needed to
convoy to the employees at the different levels.
Advantages
There are distinct advantages of written policies are as follows:
The writing of policies makes commitments on the part of
an organization
Writing ensures uniformity of application and assures
continuity of action even when the management is
changed.
Its limits freedom of action on the part of the
management, for it is work with in the boundary of
policies.
The written policies provide something concrete on which
to base an appeal if there is any disagreement about what
is the organization’s policy.
Writing helps to ensure that the professed policies are
right for organization tries to put its best foot forward.
The likelihood of wrong interpretation or
misunderstanding is very much lessened.
Written policies facilitate easy and smooth compliance.
The results in greater convenience both to the policy
frame worse and implementers
However, written policies cannot be easily changed and perfect secrecy,
when desired cannot be maintained and writing of good policies needs
fluency in English that every person does not possess.Even then, in all
large organizations, written policies are a rule rather than exception.
Implied Policies
These are the policies, which are implied from the code conduct or
from mode of behavior of business executives; but they are not stated in
terms of orally. They generally flow from philosophy of the business, it is
social values and even traditions, for instance, smoking and drinking may be
prohibited not in writing but it implied by the conduct of superior executives
who refrain from these habits while on the duty.
Originated Policies
Originated policies emanate from the company objectives which are
determined by the top management, who are primarily responsible for
shaping business policies to guide and direct them and the subordinate in the
attainment of organization’s objectives these are framed by the board of
directors the president and general manager etc, and passed on to the
executives in hierarchy for implementation.
The subordinates usually readily accept such policies because they
have been framed by higher ups in power that entrusted with the shaping of
business policy for concern.
Appealed Policies
Appealed policies are often known as “suggested policies”. Because
they are framed on the suggestions of the subordinates or those who are
implement the policies. The idea is to make a policy is more effective so that
particular problems could find solutions under it. Such policies also have
general acceptance as that of the originated policy because, they have already
got the approved of the top management.
Index
Absolute cost advantages 290
Acceptable 150
Achievable 151
Achieving locational advantage 398
Achieving superior efficiency 305
Acquiring and restructuring 257
Adaptive culture 408
ADL matrix 283
Advantages of globalization 94
Analytic 117
Annual objectives 128
Ansoff’s product 280
Appealed policies 40
Appraisal of performance 233
Asset sales and closures 264
Augmented marketing 210
Backward linkages 447
Balance 161
Balanced score card approach 147
Bargaining power of buyers 293
Bargaining power of suppliers 293
Barriers to entry 325
BCG matrix 276
Benchmarking 469
Benchmarking process 472
Benefits of strategic management 121
Best cost provider strategy 196
Bidding strategy 327
Boosting revenues 355
BPR approach 463
Branches of business 21
Brand loyalty 289
Bruce Henderson 159
Budget systems 422
Building core competency 236
Business 15,17
Business level 119
Business level strategy 179
Business Policy 29,31
Business process reengineering 453
Business purpose 22
Cadbury’s vision 131
Chaining 359
Change process 384
Changing the leadership 264
Charles Greer 233
Chnanging orientations 109
Christensen 29
Clifton Garvin 51
Combination efforts 356
Combination strategy 246
Commerce 21
Commercialization 330
Common driving force 172
Communication network 96
Companies go global 95
Company opportunities 183
Company profile 59
Comparative account 180
Comparison and competitors 70
Compensation 234
Competing in mature industries 343
Competitive environment analysis 101
Competitive position 149
Competitive position 27
Competitive situation 165
Competitive structure 291
Competitive success 171
Competitor analysis 161
Competitors 76
Complementary assets 361
Components of mission statement 135
Components of strategic management 122
Concentrated marketing 213
Concentric diversification 256
Conflict aftermath 382
Conglomerate diversification 256
Connecting customers 204
Construction industries 22
Continuous process 110
Control 209
Control and evaluation 114
Control and evaluation 129
Cooperation in a competitive environment 102
Coordination 137
Core business process 455
Core competencies 95
Corporate culture 404
Corporate decline 261
Corporate level 118
Corporate level strategy 179
Corporate strategy 138
Cost advantages 266
Cost leadership strategies 187
Crafting strategy 114
Crafting strategy 153
Creating competitive atmosphere 235
Credible commitments 322
Crisis ridden business 352, 358
Critical success factor analysis 161
Customer responsiveness 313
Customer time cycle 466
Customers 75
Cutting cost 355
Deciphering a culture 409
Declining industries 348
Defining organization mission 136
Demand conditions 291
Demand uncertainty 256
Demarketing 213
Demographic environment analysis 85
Developing a strategic vision 144
Developing the marketing mix 205
Development of strategy 132
Differential marketing 213
Differentiation strategy 189
Dilemma of business 15
Direct marketing 210
Directional policy matrix 160
Directional strategies 239
Disadvantages of globalization 94
Distribution situation 165
Diversification 282
Diversification 250
Divestment strategy 267
Divestment strategy 246
Divestment strategy 371
Division of work forces 236
Dominant economic features 169
Downstream or forward integration 253
Driving force 171
Dynamic response 100
E commerce environment 488
Economic environment 80
Economies of scale 290
Economies of scope 258
Educational institutions 491
Efficiency 26
Elements of strategy 132
Emerging foreign markets 401
Emerging industries 337
Employee development 149
Employee Relationships 149
Employee relationships 28
Employee’s development 28
Empowerment of human resources 236
End game strategies 269
End game strategies 356
Enlightened marketing 213
Environmental scanning 74
Ethics and culture 237
Ethnic mix 88
Exchange of information 55, 56
Exchange resource 55, 57
Executive summay 209
Exit barriers 292
Expansion strategy 243
Expenditure budgets 423
Export strategies 392
Express policies 37
Extent of sharing culture 408
External diversification 252
External environment 54
Extractive industries 21
Facilitation of change 235
Failure of acquisitions 326
Family ownership 103
Feature of generic strategy 197
Features of grand strategies 241
Felt conflict 382
Finance and accounting policies 214
Financial attractiveness of industry 176
Financial policies 35
Financial strategy 215
Financial strategy formulation 214
Five force model 287
Five forces analysis 160
Flexible 150
Focus strategy 191
Formation of Regional Block 99
Forward linkages 446
Fragment industries 349
Framework of strategic analysis 166
Framework of strategic management 106
Franchising 360
Franchising strategies 394
Functional approach 59
functional areas 33
Functional level 119
Functional level strategy 179
Functional manager 117
Functional strategies 128
Fundamental elements of mission 135
General electric model 285
General management 62
General manager 117
Generic strategies 185
Genetic industries 21
Geographic distribution 87
George Salk 158
Global area structure 427
Global area structure 432
Global company 93
Global competition 391
Global environment analysis 92
Global matrix structures 436
Global operational structure 430
Global strategy 179
Globalization of markets 386
Glueck 28
Government 83
Government agencies 492
Grand strategies 239
Grand strategy 127
Growth 25
Harvest strategy 371
High costs 262
Holistic 116
Horizontal diversification 252
Horizontal merger 360
Host country and government 334
Hostage taking 322
Human resource management 67
Human resources strategy 229
Identification 137
Implementation 114
Implementation control 420
Implementation matrix 441
Implementing and executing the strategy 155
Implementing BPR 462
Implementing TQM 308
Implied policies 39
Importance of Strategic management 108
Improved scheduling 255
Improvement of logistics 225
Improving profitability 265
Inadequate financial controls 262
Inbound logistics 65
Income distribution 88
Industries key success factors 175
Industry 21
Industry and competitive analysis 168
Innovative 20
Institutionalizing the strategy 128
Intellectual process 110
Internal analysis 58
Internal assessment 58
Internal diversification 252
Internal environment 51
Internal environment 54
Internal factors 68
International division structure 429
Internet economy 486
Internet technology 487
Investment in specialized assets 255
Issues in project implementation 449
Issues in strategy implementation 447
Joint venture 331
Just inventory system 307
Kenichi Ohmae 158
Key issues of technology 90
Latent conflict 381
Leadership strategy 371
Least resistance 100
Legal 83
Levels in organization 117
Levels of control 418
Licensing strategy 392
Life cycle of a joint venture 333
Limitations of financial budget 217
Location strategies 268
Logical framework 180
Logistics strategy 224
Long term contract 321
Long term objectives 125
Long term objectives 147
Long term objectives 27
Longterm nature 109
lower level 33
Macro environment 73
Maintaining market discipline 322
Management of funds 218
Manifestation of globalization 96
Manufacturing industries 22
Market 78
Market control 421
Market development 248
Market development 282
Market penetration 248
Market penetration 280
Market segmentation 160
Marketing analysis 208
Marketing and sales 66
Marketing budget 209
Marketing intermediaries 77
Marketing issues 202
Marketing planning 208
Marketing process 204
Marketing strategy 209
Marketing strategy and efficiency 306
Marketing strategy formulation 201
Marketing strategy techniques 210
Mature industries 362
Mckinsey’s 7’s framework 295
Measurable 150
Medical organizations 491
Mic ro environment 72
Michael Porter’s 185
middle level 32
Mission 133
Mission and strategic intents 146
Mission of BCG 276
Mobility of skilled resources 98
Monitoring developments 156
Motivating 150
Motive of business 19
Natural environment analysis 88
Nature and extent of competition 102
Nature and strength of competition 170
Nature of globalization
Need for explicit mission 134
New competition 263
Niche strategy 371
Non political 117
Non price competition 366
Non price competitive strategies 367
Obligations 126
Operating environment 75
Operational control system 422
Operational strategy 179
Operations 66
Operations planning and control 223
Opportunities 178
Opportunity 53
Opportunity and issue analysis 165
Oral policies 37
Ordering culture 408
Organization 77
Organization infrastructure 67
Organizational conflict 379
Organizational inertia 264
Organizational politics 375
Organizational structure 274
Organizing marketing 211
Outbound logistics 66
Over expansion 262
Past capabilities and performance 68
People 207
People evidence 207
Perceived conflict 382
Person marketing 211
Personal policy 36
PEST analysis 160
Peter F Drucker 19
Place 206
Place marketing 211
Policies 128
Political 84
Political and legal environment 82
Poor implementation 331
Poor management 262
Population size 86
Portfolio analysis 271
Potential competitors 289
Power 377
Premise control 419
Price 206
Price cutting 363
Price leadership 366
Price signaling 365
Primary activities 64
Proceed with caution 100
Process 207
Procurement 67
Product 205
Product development 248
Product development 282
Product life cycle 274
Product market expansion greed 248
Product situation 165
Production policies 34
Production strategy formulation 222
Production system 223
Productivity 148
Productivity 27
Profitability 147
Profitability 26
Profitability 27
Projected financial budget 216
Projected financial statements 216
Promotion 206
Protecting product quality 255
Public 77
Public responsibility 149
Public responsibility 28
Purposeful direction 235
Rationale BPR 461
Rationale for joint venture 332
Reasons for functional strategies 200
Reasons for globalization 93
Reconciliation and priorities 137
Recruitment and selection 223
Redefining strategic focus 264
Reduce transportation costs 96
Related diversification 251
Relationship marketing 210
Remote environment 79
Research and development strategies 227
Research and development strategy 225
Retrenchment strategy 246
Revenue budgets 423
Risk 162
Risks of Strategic management 122
salesmanship 34
Scale of entry 330
Scenario planning 160
Scheduling 424
Screening 327
Services 66
Services marketing 211
Setting objectives 147
Shaping external environment 101
Short term contract 321
Situational analysis 163
Six sigma 474
Six sigma methodologies 476
Social marketing 210
Socio cultural environment 84
Sources of conflict 380
Sources of funds 215
Sources of power 377
Stability 25
Stability strategy 242
Steps in BPR 463
Strategic alliances 321
Strategic response to environment 100
Strategic alternatives 185
Strategic analysis 159
Strategic business unit 272
Strategic change management 372
Strategic Choice 161
Strategic control system 416
Strategic decisions 112
Strategic finance and accounting 61
Strategic groups 173
Strategic HRD 62
Strategic leadership 411
Strategic management 105
Strategic management linkages 446
Strategic management model 114
Strategic management process 122
Strategic marketing 60
Strategic move of rivals 174
Strategic planning 109
Strategic production 61
Strategic reward system 424
Strategic uncertainty 142
Strategy revision 354
Strategy identification 181
Strategy implementation 161
Strategy of last resort 268
Strength 54
Strengths 177
Strong culture companies 406
Structuring strategic decisions 155
Subject matter of management 110
Substitute products 294
Success factors 70
Successful turnaround strategies 264
Suitable 150
Superior innovation 310
Superior quality 308
Suppliers 75
Survival 24
SWOT 53
SWOT analysis 161
Synchromarketing 213
System management 481
Tasks in Strategic management 114
Technical issues 222
Technological leadership 149
Technological changes 256
Technological environment analysis 89
Technological leadership 28
Technology development 67
Territory \ Service industries 22
The value chain approach 59
The vision 130
Thomson Watson 133
Threats 53
Threats 178
top management 32
Total Quality management 308
TOWS matrix 270
Training 233
Transferring competencies 258
Triggers of change 171
Turbulent high velocity markets 340
Turnaround firm 266
Turnaround strategy 261
Types of budget 217
Types of diversification 250
Types of strategic budgets 422
Understandable 151
Understanding 137
Understanding mission 137
Unforeseen demand shifts 263
Unhealthy cultures 407
Unrelated diversification 251
Upstream or back ward integration 253
Value chain 298
Value chain approach 64
Value creation process 299
Value delivery network 203
Vertical diversification 252
Vertical integration 254
Vertical integration 316
Weak culture companies 407
Weakness 54
Weakness and competitive deficiencies 183
Weaknesses 178
William Spender 199
Worth of business 220
Written policy 37