BUSINESS POLICY AND STRATEGIC MANAGEMENT

It’s a privilege to bring before you, the first edition of the book “Business Policy & Strategic Management”. The book has been written keeping in mind the young management students, but is useful for all for better understanding of the terminology and concepts of Business Policy formulation and Strategic Management of Business units.

With improved means of communications and new breakthroughs in technology, world has become a global village. Business organisations now have access to world market and have a chance to achieve exponential growth. While this has opened options for the customers by providing them access to the best and freedom to choose the most cost effective option, it has pitched the business organisations against competitors from across the globe. In this era of cut throat competition, it becomes necessary for an organisation to have strong fundamentals, sound understanding of the market and changing business environment, mechanism to formulate and implement policies and strategies best suited to the modern world to be successful.

This book is an effort to encapsulate the basic concepts and introduce the readers to the fundamentals of business policy and strategic management. Book has been written keeping the young management students in mind; Language of the book has been kept simple and effort has been made to avoid using management jargons for better grasp and understanding of the readers. To explain the concepts, examples and parallels have been drawn from important incidents and day to day life to make it more relatable to the readers. Sound understanding of the concepts of policy formulation and strategic management process prepares the foundation to catapult the managers to the big world of strategic decision making, become future leaders to lead organisations from the front.

The book brings to you basic concepts of strategic management and business policy which are being used by organisations to optimally utilize their scarce resources and maximize profits. The book has been structured to introduce the readers to the concepts step by step without rushing through them for better understanding and retentivity of the concepts. Accordingly, the book has been divided into five chapters starting from basic concepts to delving into finer details of each aspect of the process of policy and strategy formulation-

Chapter -1: Business Policy and Strategic Management- is the introductory chapter to introduce the readers to the basic definitions, principles, concepts and evolution of business policy. It helps in differentiating policy, strategy and tactics. The chapter brings forth the role of forecasting and planning, basic concepts and process of strategic management. The concepts and processes discussed in brief in this chapter have been discussed in detail in subsequent chapters.

Chapter -2: Business and its Environment – introduces the reader to the importance and effect of Business environment classifying various environmental factors under two sub heads- Micro and Macro Business Environment. After providing detail of characteristics of environment and concept of environmental scanning, reader is presented with various tools for Environmental Analysis. The study of competitive Environmental analysis is explained with the analysis of ETOP, QUEST and EEFM. Tools for internal analysis such as SWOT, Value chain and Critical factor analysis that help the company decision-makers to accurately identify areas for growth or form a practical business strategy have also been discussed. Other techniques such as VIRO, Balanced Scorecard, PESTEL etc being used for the development of Strategic advantage profile have also been detailed.

Chapter-3: Strategic management and formulation of strategies – Strategy plays an important role in success of any business organisation and so assumes a place of importance in strategic management. This chapter therefore emphasizes on the need, levels and various approaches to strategy formulation and the strategy options available to a business organization. Depending on the present environment and stage/situation of the business organization, most suitable strategy may be formulated and adopted by the organization.

Chapter-4: Business strategy analysis tools – Analysis of the strategy being adopted by the organization is necessary for identifying the need for course correction and taking suitable action before it’s too late. This chapter presents an array of tools such as BCG matrix, Stoplight matrix, GE McKinsey matrix, Directional policy matrix and Product market evolution matrix with relevant diagrams and examples for better understanding of the concept behind each tool to help in field application.

Chapter-5: Implementation of strategy- Most important aspect of any plan, policy and strategy is its implementation at ground level. Successful strategy formulation does not guarantee successful strategy implementation. This chapter, therefore, introduces the readers to various factors such as organizational structure and organizational culture which are to be kept in mind at the time of resource allocation for successful implementation of strategy.

Every day we come across new businesses being set up and old getting shut down due to fierce competition, obsolescence of technology or substitution by a better alternative. Global giants like Nokia, Kodak, Xerox and local brands such as BPL, Videocon and Dalda or no more visible. These examples buttress the importance of strategic management and need for continuous evolution on part of the business organisations.

This book has been written keeping in view the course content of the Universities for BBA and MBA courses. All the topic taught at universities have been dealt in sufficient details to provide an in-depth understanding. We hope that the students and teachers will find it useful for understanding the basics of the subject and build a foundation for future challenges.