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Business Policy and Strategy 1
Business Policy and Strategy
Lecture 04
Business Policy and Strategy 2
Recap• Important Terminologies in Business strategy
and policy– Vision & Mission
• Comparison of vision and mission
– Long Term Objectives– Strategies– Policies– Strategists
Business Policy and Strategy 3
Today’s Lecture
• SWOT Analysis– Example
• Intuition and analysis– Pillars of intuition– Benefits of intuition in decision making
Business Policy and Strategy 4
SWOT Analysis
• Albert S Humphrey in the 1960s– Strengths and weaknesses are often internal to
your organization– Opportunities and threats generally relate to
external factors• Internal-External Analysis and the SWOT
Matrix is sometimes called an IE Matrix.
Business Policy and Strategy 5
Strengths
• What advantages does your organization have?• What do you do better than anyone else?• What unique or lowest-cost resources can you
draw upon that others can't?• What do people in your market see as your
strengths?• What factors mean that you "get the sale"?• What is your organization's Unique Selling
Proposition (USP)?
Business Policy and Strategy 6
Unique Selling Proposition (USP)
• USP is the unique thing that you can offer that your competitors can't.
– It's your "Competitive Edge." – It's the reason that customers buy from you and you alone. – USPs have helped many companies succeed
• However, USPs are often extremely difficult to find. And as soon as one company establishes a successful USP in a market, competitors rush to copy it
Business Policy and Strategy 7
Weaknesses
- What could you improve?- What should you avoid?- What are people in your market likely to see
as weaknesses?- What factors lose you sales?- It's best to be realistic now, and face any
unpleasant truths as soon as possible
Business Policy and Strategy 8
Opportunities- What good opportunities can you spot?- What interesting trends are you aware of?- Useful opportunities can come from such things
as:– Changes in technology and markets on both a broad
and narrow scale.– Changes in government policy related to your field.– Changes in social patterns, population profiles,
lifestyle changes, and so on.– Local events.
Business Policy and Strategy 9
Threats
- What obstacles do you face?- What are your competitors doing?- Are quality standards or specifications for your
job, products or services changing?- Is changing technology threatening your
position?- Do you have bad debt or cash-flow problems?- Could any of your weaknesses seriously
threaten your business?
Business Policy and Strategy 10
SWOT Matrix
Strengths
List 4-5 internal strengths here
Weaknesses List 4-5 internal weaknesses here
OpportunitiesList 4-5 external opportunities here
S-O strategies W-O strategies
ThreatsList 4-5 external threats here
S-T strategies W-T strategies
Business Policy and Strategy 11
Intuition Analysis
• Business Strategy tries to bring together qualitative and qualitative information
• Intuition rests on:– Past experiences– Judgment– Feelings
Business Policy and Strategy 12
Intuition Analysis
• Intuitions help in decision making where:– Uncertainty prevails– Little or no precedence exists– Highly interrelated variables exist– A choice from various possible alternatives is
needed– Intuition and analytical judgment requires inputs
from all managerial levels– Analytical thinking and intuitive thinking
complement one another
Business Policy and Strategy 13
Summary
• SWOT Analysis– Strengths– Weaknesses– Opportunities– Threats
• Intuition Analysis
Business Policy and Strategy 14
Next Lecture
• Vision and Mission Statement– Where we are and where we would like to be
• What is our business?• “What do we want to become?”
– Examples of Vision and Mission Statement