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