Introduction to Strategies: Introduction, Fundamentals of

Strategy, Conceptual Evolution of Strategy, Scope and

Importance of Strategies, Purpose of Business, Difference
between Goals and Objectives of Business, Strategic
Intent through Vision and Mission Statements, Core
Competencies of Business
Strategic Management: Introduction, Strategic Management, Need, scope, key
features and importance of strategic management, Role of Strategists in
Decision Making, strategists at various management levels, Types of
Strategies, Limitations of Strategic Management
Strategy Analysis: Introduction, Strategy Analysis and its Importance,
Environmental Appraisal and Scanning Techniques, Organisational Position
and Strategic Advantage Profile, Strategic Management Model
Strategy Formulation and Implementation: Introduction, Strategy Formulation,
Process in Strategy Formulation, Strategy Implementation and its Stages,
Reasons for Strategy Failure and Methods to Overcome, Strategy Leadership
and Strategy Implementation, Strategic Business Units (SBUs)
Strategic Control and Evaluation: Introduction, Strategy Evaluation, Strategic
Control, Difference Between Strategic Control and Operational Control,
Concept of Synergy and its Meaning, Key Stakeholders Expectations
Business Policies: Introduction, Overview of Business Policies, Importance of
Business Policies, Definitions of Policy, Procedures, Process and Programmes,
Types of Policies, Business Policy Statements, Corporate Culture
Business Policy and Decision Making: Introduction, Factors Considered
Before Framing Business Policies, Steps Involved in Framing Business
Policies, Policy Cycle and its Stages, Implementation of Policy Change, Role
of Policies in Strategic Management, Business Policy and Decision Making

Business Continuity Plan: Introduction, Concepts of Business Continuity Plan

(BCP), Relevance and Importance of BCP, Steps in Business Continuity Plan,
Business Impact Areas, BCP and its Influence on Strategic Management, BCP
and its Influence on Policy Making, Contingency Planning
Business Investment Strategies: Introduction, Business Plan and Business
Venture, Business Investment Strategies
Strategies for Multinational Corporations: Introduction, Multinational
Corporations (MNCs), Benefits of MNCs, Limitations of MNCs, Business
Strategies of MNCs, Techniques Employed by MNCs to Manage Markets,
MNC, TNC and Global Companies
Strategic Alliances: Introduction, Strategic Alliances, Types of Strategic
Alliances and Business Decisions, Problems Involved in Strategic Alliances
Role of Creativity and Innovation in Business: Introduction, Creativity,
Innovation, Creating and Building Creative and Innovative Business Culture,
Business Practices Adopted to Promote Creativity and Innovation, Importance
of Creativity and Innovation in Business, Challenges Involved in Creativity
and Innovation
Business Ethics and Corporate Social Responsibility : Introduction, Ethics and
Values, Ethical Conduct and Unethical Conduct, Impact of Ethical Conduct,
Corporate Social Responsibilities (CSR), Business obligations, Social Audit
and Corporate Governance
Challenges in Strategic Management: Introduction, Strategic Management as
an Organisational Force, Dealing with Strategic Management in Various
Situations, Strategic Management Implications and Challenges
Recent Trends in Strategic Management: Introduction, Strategic Thinking,
Organisational Culture and its Significance, Organisational Development and
Change, Change Management, Models of Leadership Styles and its Roles,
Strategic management in a new globalised economy

Q.1 What do you understand by the term Strategy in the context of

Business Management and Policy? And what are the stages in the
formulation of a Strategy?
Ans Strategy It is a common direction set for the company and its various
components to accomplish a desired position in a future. A meticulous
planning process results in strategy. It is the comprehension of the goals
which has logical step by step process. It defines a general mission and
vision of an organisation. It is important to consider that the decisions
taken by an organisation are likely to affect the employees, customers and
competitors. Business strategy is used to achieve competitive advantage.
The efficient development and implementation of strategy depends on the
capability of the organisation. This includes the ability to prepare the
strategic goals and implement the plans through strategic management.
Strategy exists at different business levels. The different levels are:
1. Corporate strategy:- This is regarding the general function and scope of
business to meet the stake holders expectations. As it is significantly
influenced by the investors in the business, it is also called the critical
level strategy.
2. 2. Business strategy:- This is regarding how a business competes
effectively in a particular market. It includes strategic decisions about the
selection of a product and meeting customer requirements.
3. 3. Operational strategy:- This is regarding how each part of the
business is organised and delivered to the corporate and business level.
Operational strategy focuses on issues of resources and practices of an
organisation Strategy formulation is the development of long term plans.
It is used for the effective management of environmental opportunities
and for the threats which weaken corporate management.

Its objective is to express strategical information to achieve a definite

goal. The following are the features of strategy formulation:1. Defining the corporate mission and goals.
2. . Specifying achievable objectives
3. 3. Developing strategies
4. 4. Setting company policy guidelines

The main process involved in strategy formulation is as follows:

1. Stimulate the identification:- Identifying useful information like
planning for strategic management, objectives to achieve the goal of the
employees and the stakeholders.
2.2. Utilisation and transfer of useful information as per the business
strategies:- A number of question arising during utilisation and transfer of
information have to be solved.

3.Q.2

What, in brief, are the types of Strategic Alliances and the purpose
of each? Supplement your answer with one real life example of each.
Ans Strategic alliance is the process of mutual agreement between the
organisations to achieve the objectives of common interest. They are
obtained by the co-operation between the companies. Strategic alliance
involves the individual organisation to modify its basic business activities
and join in agreement with similar organisations to reduce duplication of
manufacturing products and improve performance. It is stronger when the
organisations involved have balancing strengths. They contribute in
successful implementation of strategic plan because it is strategic in
nature. It provides relationship between organisations to plan various
strategies in achieving a common goal.
The different types are listed below:1. Joint Venture :- It is the most powerful business concept that has the
ability to pool two or more organisation in one project to achieve a
common goal. In a joint venture both the organisation invest on the
resources like money, time and skills to achieve the objectives.
2. Mergers and Acquisitions :- It is the process of combining two or more
organisations to form a single organisation and achieve greater
efficiencies of scale and productivity. The main reason to involve into
merger is to join with other company and reap the rewards obtained by
the combined strengths of two organisations. A smart organisations
merger helps to enter into new markets, acquire more customers, and
excel among the competitors in the market. The different types or mergers
are: HORIZONTAL MERGER It takes place when two organisations
competing in the same market join together. VERTICAL MERGER
This involves the union of a customer with the vendor.

3. Collaborations and Co-Branding:- It is the process of co-operative

agreement of two or more organisations which may or may not have
previous relationship of working together to achieve a common goal. It is
the beginning to pool resources like knowledge, experience and sharing
skills of team members to effectively contribute to the development of a
product rather working on narrow tasks as an individual team member in
support to the development.
. 4. Technological Partnering:- It is the process of associating the
technologies of two different companies to achieve a common goal. The
two organisations work as co- owners in business and share the profits
and losses. The technologies of individual organisations are shared to
achieve desired outcome.
5. Contractual Agreements:- It is the process of agreement with specific
terms between two or more organisations which guarantee in performing
a specific task in return for a valuable benefit. The contractual agreement
is the heart of business dealings. It is the most significant areas of legal
concern and involves variations in certain situations and complexities.
6. Outsourcing:- It is the process of entering into a contract with an
organisation or a person to perform a particular function. Most of the
organisations outsource the work in numerous ways. The function being
outsourced is considered as non core to the organisation.
.
6.Q.

3 What is a Business Plan? What purpose does it serve?

Ans A business plan is a detailed description of how an organization

intends to produce, market and sell a product or service. Whether the
business is housing, commercial or some other enterprise, a good
business plan describes to others and to your own board of directors,
management and staff the details of how you intend to operate and
expand your business. A solid business plan describes who you are, what
you do, how you will do it, your capacity to do it, what financial
resources are necessary to carry it out, and how you intend to secure those
resources. A well-written plan will serve as a guide through the start-up
phase of the business. It can also establish benchmarks to measure the
performance of your business venture in comparison with expectations
and industry standards. And most important, a good business plan will
help to attract necessary financing by demonstrating the feasibility of
your venture and the level of thought and professionalism you bring to

the task. A well-written plan will serve as a guide through the start-up
phase of the business. It can also establish benchmarks to measure the
performance of your business venture in comparison with expectations
and industry standards. And most important, a good business plan will
help to attract necessary financing by demonstrating the feasibility of
your venture and the level of thought and professionalism you bring to
the task. A good business plan will help attract necessary financing by
demonstrating the feasibility of your venture and the level of thought and
professionalism you bring to the task.

A good business plan serves the following purposes:

1. Revenue Generation Your organization may hope to create a
business that will generate sufficient net income or profit to finance other
programs, activities or services provided by your organization.
2. Employment Creation A new business venture may create job
opportunities for community residents or the constituency served by your
organization.
3. Neighbourhood Development Strategy A new business venture might
serve as an anchor to a deteriorating neighbourhood commercial area,
attract additional businesses to the area and fill a gap in existing retail
services. You may need to find a use for a vacant commercial property
that blights a strategic area of your neighbourhood. Or your business
might focus on the rehabilitation of dilapidated single family homes in
the community.
4. 4. Establish Goals - Once you have identified goals for a new business
venture, the next step in the business planning process is to identify and
select the right business.
7.6. Analysis of Local and Regional Industry Trends - Another method of
investigating potential business opportunities is to research local and
regional business and industry trends. You may be able to identify which
business or industrial sectors are growing or declining in your city,
metropolitan area or region. The regional or metropolitan area planning
agency for your area is a good source of data on industry trends.
7. Internal Capacity - The board, staff or membership of your
organization may possess knowledge and skills in a particular business
sector or industry. Your organization may wish to draw upon this internal
expertise in selecting potential business opportunities.

8.Q.4

What is the chief purpose of a Business Continuity Plan and what

are its components for effective implementation. Explain in a sentence or
two as to how it is different from a Business Plan.
Ans. The Business Continuity Plan is a tool to allow organizations to
consider the factors and steps necessary to prepare for a crisis (disaster or
emergency) so that it can manage and survive the crisis and take all
appropriate actions to help ensure the organizations continued viability.
The advisory portion of the plan is divided into two parts: Planning
process - It provides step-by-step Business Continuity Plan preparation
and activation guidance, including readiness, prevention, response, and
recovery/resumption. Implementation and maintenance: It gives the
details of tasks required for the Business Continuity Plan to be
maintained as a living document, changing and growing with the
organization and remaining relevant and executable. The purpose of the
business continuity plan is to prepare to face the unthinkable situations
that may threaten an organizations future. This new challenge goes
beyond the mere emergency response plan or disaster management
activities that we previously employed.
Following steps are required to be fulfilled for effective implementation
of the business continuity plan:
1. Educate and Train: The BCP is only as valuable as the knowledge that
others have of it. Education and training are necessary components of the
BCP process. They require a time commitment from the Crisis
Management Team, the Response Teams, and the general employee
population.
2. 2. Educate and Train Teams: The Crisis Management and Response
Teams should be educated about their responsibilities and duties. Check
lists of critical actions and information to be gathered are valuable tools
in the education and response processes.
3. 3. Educate and Train All Personnel: All personnel should be trained to
perform their individual responsibilities in case of a crisis. Such training
could include procedures for evacuation, shelter-in-place, check-in
processes to account for employees, arrangements at alternate worksites,
and the handling of media inquiries by the company.
4. 4. Review of BCP:
The BCP should be regularly reviewed and evaluated. Reviews should
occur according to a pre-determined schedule, and documentation of their
view should be maintained as necessary. The following factors can trigger
are view and should otherwise be examined once a review is scheduled:
Risk Assessment Sector/Industry Trends Regulatory Requirements Event
Experience Test/Exercise Results

A Business plan is a detailed description of how an organisation intends

to produce, market and sale a product or service. A Business continuity
plan is an ongoing process supported by senior management and funded
to ensure that the necessary steps are taken to identify the impact of
potential losses, maintain viable recovery strategies and plans, and ensure
the continuity of operations through personnel training, plan, testing and
maintenance.

Q.6 Name and explain any three ways in which a Companys CSR can be
expressed
Ans. CSR is a concept whereby companies integrate social and
environmental concerns in their business operations and in their
interaction with their stakeholders on a voluntary basis as they are
increasingly aware that responsible behaviour leads to sustainable
business success.
CSR is also about managing change at company level in a socially
responsible manner. If companies succeed in managing change in a
socially responsible manner, this will have a positive impact at the macroeconomic level.

Following are the different ways in which company's CSR can be

expressed.
1. Employment and Social Affairs Policy Within a business CSR relates
to quality employment, life-long learning, information, consultation and
participation of workers, equal opportunities, integration of people with
disabilities anticipation of industrial change and restructuring. Social
dialogue is seen as a powerful instrument to address employment-related
issues.
2. . Enterprise policy Only competitive and profitable enterprises are able
to make a long-term contribution to sustainable development by
generating wealth and jobs without compromising the social and
environmental needs of society.

3. . Consumer Policy CSR has partly evolved in response to consumer

demands and expectations. Consumers, in their purchasing behaviour,
increasingly require information and reassurance that their wider
interests, such as environmental and social concerns, are being taken into
account. Consumers and their representative organisations have an
important role to play in the evolution of CSR. If CSR is therefore to
continue to serve its purpose, strong lines of communication between
enterprises and consumers need to be created.
Q.1Having formulated a Business Strategy, what are the steps in its
implementation? Explain each in a sentence or two.
Ans. A strategy is an operational tool to achieve the goals, and thus, the
corporate mission. Strategies do not attempt to outline exactly how the
enterprise is to accomplish its objectives. A company may view
downsizing as a strategy in a competitive market to render cost-effective
services. Thus, strategy provides a framework to guide thinking and
action. Strategies are very much useful in organizations for guiding,
planning and control. Strategy is a way of life both at the macro as well as
micro levels for everyone, whether it is a nation or a company. To win
over in a given complex situation, the organizations, even trans- nationals
adopt strategies.

Q. types, or levels of strategies

Corporate strategy
Corporate strategy defines what business or businesses the firm is in or should be in,
how each business should be conducted, and how it relates to society. This strategy is
for the company and all of its business as a whole. Corporate strategies are established
at the highest levels in the organization; they generally involve a long-range time
horizon and focus on the entire organization. At the corporate level the concern
revolves around the definition of business in which the corporation wishes to
participate and the acquisition and allocation of resources to these business units.
(Christensen, Andrew and Bower, 1987; Andrews, 1971).
Business strategy
Business strategy defines how each individual business will attempt to achieve its
mission within its chosen field of endeavour. This strategy referred to each separate
business unit (SBU) or strategic planning unit (SPU). At this level strategy two critical
issues are specified: (1) the scope or boundaries of each business and the operational

links with corporate strategy, and (2) the basis on which the business unit will achieve
and maintain a competitive advantage within its industry (Wheelwright, 1984).
Functional strategy
Functional strategy focuses on supporting the corporate and business strategies. This
strategy is the a strategy for each specific functional unit within a business. Functional
strategies primarily are concerned with the activities of the functional areas of a
business (i.e., operations, finance, marketing, personnel, etc.) will seaport the desired
competitive business level strategy and complement each other.

20.Q.3What

are the main components of Business Plan, explaining the

role of each in the Plan?
Ans. A business plan is a detailed description of how an organization
intends to produce, market and sell a product or service. A solid business
plan describes who you are, what you do, how you will do it, your
capacity to do it, what financial resources are necessary to carry it out,
and how you intend to secure those resources. A well-written plan will
serve as a guide through the start-up phase of the business. It can also
establish benchmarks to measure the performance of your business
venture in comparison with expectations and industry standards. And
most important, a good business plan will help to attract necessary
financing by demonstrating the feasibility of your venture and the level of
thought and professionalism you bring to the task. A good business plan
will help attract necessary financing by demonstrating the feasibility of
your venture and the level of thought and professionalism you bring to
the task.
A business plan should contain the following components:
1. Executive Summary: The purpose of this component is to provide
direction and help you establish your goals as clearly as possible. With
this clearly spelled out, both management and employees can focus their
efforts. Also it will help with investors and bankers in that they can
clearly understand what your. It should include the following information.

A history of the company (if you're already in business) or a history of the

idea development. A description of the products or services you plan to
develop and sell.
2. Company and Product Description: In this component one should
provide type of business, reason of creating business unit, referencing the
goal and attach references of business plan. Product or Service-Focus on
the feature that distinguishes from rest of market and what will attract
consumers to your product or service.
3.Market Description: A key composition of the operation of your
business will be your sales and marketing strategy, so one must describe
how you will inform your target market about your product or service and
how you will convince customer to purchase.
21.Production Description:-Describe the steps from raw material to
finished goods, packaged and ready for distribution and sale. Avoid using
industry jargon to describe the production process. Staffing:-Describe the
type of staff, their qualification, skill, salaries, other benefitand how they
will be recruited.
4.Equipment and Material: In this component one must describe the
special type of machines and materials required to purchase, their cost
and source. Facility:-Facilities and other infrastructure required for the
company, specialized features if any are to be described. Market
Description:-Strategy for locating your target market, informing or
educating customers about your product or service and convincing them
to buy it. Discuss the products feature you plan to emphasize to gain the
attention of your target market.

27.Q.6What

is Corporate Social Responsibility? Why is it becoming

increasingly relevant in todays Business?
Ans. Corporate social responsibility (CSR), also known as corporate
responsibility, corporate citizenship, responsible business, sustainable
responsible business(SRB), or corporate social performance, is a form of
corporate self-regulation integrated into a business model. Ideally, CSR
policy would function as a built-in, self-regulating mechanism whereby
business would monitor and ensure its adherence to law, ethical
standards, and international norms. Business would embrace
responsibility for the impact of their activities on the environment,
consumers, employees, communities, stakeholders and all other members

of the public sphere. Furthermore, business would proactively promote

the public interest by encouraging community growth and development,
and voluntarily eliminating practices that harm the public sphere,
regardless of legality. Essentially, CSR is the deliberate inclusion of
public interest into corporate decision-making, and the honouring of a
triple bottom line: People, Planet and Profit.

Strategy Analysis
The first step in evaluating and choosing a strategy is to review the results of the
strategic situation assessment consisting of an analysis of the general, industry, and
internal environments, in terms of factors critical to the success of the business.
George Steiner stated that three types of data are required to perform a situation audit:
identifying threats, strengths, and weaknesses.
1. Past performance of the firm.
2. Data about the current situation, including:
1.
2.
3.
4.
5.

Analysis of customers and markets.

Resources of the company.
Competition.
Environmental setting.
Other performance measures or areas of interest.

3. Forecasts of the future.

Critical success factors (CSFs) for any business are the limited number of areas in
which satisfactory results ensure successful competitive performance. Studies have
shown that three to six factors are usually critical to success in most industries.
In general, at least five criteria tend to determine which factors are critical to the
business and their relative importance:

1. Impact on performance measures, such as market share, profits, cash flow,

and the like.

2. Relationship to strategic thrusts, such as differentiation, costs,

segmentation, preemptive, turnaround, renewal, and the like.

3. Relationship to life-cycle stage, that is, introduction, growth, maturity, and

aging and decline.

4. Relates to a major activity of the business, such as marketing at IBM.

5. Involves large amounts of money relative to other activities of the firm.
There are several techniques for identifying CSFs for a business, its industry, and its
general environment. It is important to evaluate the firm, but it is equally important
evaluate the capabilities of competitors.
The development and evaluation of alternatives should be two separate and distinct
steps. Three basic questions must be asked during strategy evaluation:
1. How effective has the existing strategy been?
2. How effective will that strategy be in the future?
3. What will be the effectiveness of selected alternative strategies (or
changes in the existing strategy) in the future?

The form of strategic analysis and choice varies considerably according to the stage of
development of the firm, and the focus differs at the different firm levels.
The evaluation should take place at the corporate, business, and functional levels,
with close scrutiny of policies and plans at each of these levels.
For multi-industry and multi product/product firm, strategic analysis begins at the
corporate level.
Corporate strategy provides guidance for resource allocations among businesses and
also indicates standards for adding new businesses or deleting existing ones.
Alternative business-level strategies must be examined within the context of each
business unit in multi-industry firms.
Functional strategies must be identified to initiate and control daily business activities
in a manner consistent with business strategy.

The strategic management model

The strategic management model identifies concepts of strategy and the elements
necessary for development of a strategy enabling the organization to satisfy its
mission. Historically, a number of frameworks and models have been advanced which
propose different normative approaches to strategy determination. However, a review

of the major strategic management models indicates that they all include the following
elements:
1.
2.
3.
4.
5.

Performing an environmental analysis.

Establishing organizational direction.
Formulating organizational strategy.
Implementing organizational strategy.
Evaluating and controlling strategy.

Strategic management is a continuous and dynamic process. Therefore, it should be

understood that each element interacts with the other elements and that this interaction
often happens simultaneously.
The major models differ primarily in the degree of explicitness, detail, and
complexity. These differences derive from the differences in backgrounds and
experiences of the authors. Some of these models are briefly presented below.

MODELS

Andrews' Models
In 1965, Kenneth Andrews developed a simple model. This model includes the choice
of a strategy, but ignores implementation and control. In 1971,Andrews formulated a
more complete model that included implementation, but it still ignores a strategic
control and evaluation.

Glueck's Model
William F. Glueck developed several models of strategic management based on the
general decision-making process.
The phases of this model are as follows:
* Strategic managements elements: "...to determine mission, goals, and values of
the firm and the key decision makers."
* Analysis and diagnosis: " ...to search the environment and diagnose the impact of
the threats and opportunities."
* Choice: ...to consider various alternatives and assure that the appropriate strategy
is chosen."

* Implementation: "...to match plans, policies, resources, structure, and

administrative style with the strategy."
* Evaluation: "...to ensure strategy and implementation will meet objectives."

The Schendel And Hofer Model

Dan Schendel and Charles Hoferdeveloped a strategic management model,
incorporating both planning and control functions.
Their model consists of several basic steps:
(1) goal formulation,
(2) environmental analysis,
(3) strategy formulation,
(4) strategy evaluation,
(5) strategy implementation, and
(6) strategic control.

The Thompson And Strickland Model

Thompson and Strickland developed several models of strategic management.
According to Thompson and Strickland strategic management is an ongoing process:
"nothing is final and all prior actions and decisions are subject to future
modification."
This process consists of five major five ever-present tasks:
1. Developing a concept of the business and forming a vision of where the
organization needs to be headed.
2. Converting the mission into specific performance objectives.
3. Crafting a strategy to achieve the targeted performance.
4. Implementing and executing the chosen strategy efficiently and effectively.
5. Evaluating performance,

STRATEGY FORMULATION AND STEPS

Strategy formulation refers to the process of choosing the most appropriate course of
action for the realization of organizational goals and objectives and thereby achieving
the organizational vision. The process of strategy formulation basically involves six
main steps.
Though these steps do not follow a rigid chronological order, however they are very
rational and can be easily followed in this order.
1.Setting Organizations objectives - The key component of any strategy statement is
to set the long-term objectives of the organization. It is known that strategy is
generally a medium for realization of organizational objectives. Objectives stress the
state of being there whereas Strategy stresses upon the process of reaching there.
Strategy includes both the fixation of objectives as well the medium to be used to
realize those objectives. Thus, strategy is a wider term which believes in the manner
of deployment of resources so as to achieve the objectives.
While fixing the organizational objectives, it is essential that the factors which
influence the selection of objectives must be analyzed before the selection of
objectives. Once the objectives and the factors influencing strategic decisions have
been determined, it is easy to take strategic decisions.
2. Evaluating the Organizational Environment - The next step is to evaluate the
general economic and industrial environment in which the organization operates. This
includes a review of the organizations competitive position. It is essential to conduct a
qualitative and quantitative review of an organizations existing product line. The
purpose of such a review is to make sure that the factors important for competitive
success in the market can be discovered so that the management can identify their
own strengths and weaknesses as well as their competitors strengths and weaknesses.
3.After identifying its strengths and weaknesses, an organization must keep a track of
competitors moves and actions so as to discover probable opportunities of threats to
its market or supply sources.
4.Setting Quantitative Targets - In this step, an organization must practically fix the
quantitative target values for some of the organizational objectives. The idea behind
this is to compare with long term customers, so as to evaluate the contribution that
might be made by various product zones or operating departments.
5.Aiming in context with the divisional plans - In this step, the contributions made by
each department or division or product category within the organization is identified

and accordingly strategic planning is done for each sub-unit. This requires a careful
analysis of macroeconomic trends.
6.Performance Analysis - Performance analysis includes discovering and analyzing
the gap between the planned or desired performance. A critical evaluation of the
organizations past performance, present condition and the desired future conditions
must be done by the organization. This critical evaluation identifies the degree of gap
that persists between the actual reality and the long-term aspirations of the
organization. An attempt is made by the organization to estimate its probable future
condition if the current trends persist.
7.Choice of Strategy - This is the ultimate step in Strategy Formulation. The best
course of action is actually chosen after considering organizational goals,
organizational strengths, potential and limitations as well as the external
opportunities.

STARTEGY IMPLEMENTATION AND STAGES

Strategy

implementation is the translation of chosen strategy into organizational

action so as to achieve strategic goals and objectives. Strategy implementation is also
defined as the manner in which an organization should develop, utilize, and
amalgamate organizational structure, control systems, and culture to follow strategies
that lead to competitive advantage and a better performance. Organizational structure
allocates special value developing tasks and roles to the employees and states how
these tasks and roles can be correlated so as maximize efficiency, quality, and
customer satisfaction-the pillars of competitive advantage. But, organizational
structure is not sufficient in itself to motivate the employees.
An organizational control system is also required. This control system equips
managers with motivational incentives for employees as well as feedback on
employees and organizational performance. Organizational culture refers to the
specialized collection of values, attitudes, norms and beliefs shared by organizational
members and groups.
Follwoing are the main steps in implementing a strategy:
Developing an organization having potential of carrying out strategy
successfully.
Disbursement of abundant resources to strategy-essential activities.
Creating strategy-encouraging policies.
Employing best policies and programs for constant improvement.
Linking reward structure to accomplishment of results.
Making use of strategic leadership.

Excellently formulated strategies will fail if they are not properly implemented. Also,
it is essential to note that strategy implementation is not possible unless there is
stability between strategy and each organizational dimension such as organizational
structure, reward structure, resource-allocation process, etc.
Strategy implementation poses a threat to many managers and employees in an
organization. New power relationships are predicted and achieved. New groups
(formal as well as informal) are formed whose values, attitudes, beliefs and concerns
may not be known. With the change in power and status roles, the managers and
employees may employ confrontation behaviour

STRATEGIC ALLIANCES
A strategic alliance in business is a relationship between two or more businesses that
enables each to achieve certain strategic objectives neither would be able to achieve
on their own. The strategic partners maintain their status as independent and separate
entities, share the benefits and control over the partnership, and continue to make
contributions to the alliance until it is terminated. Strategic alliances are often formed
in the global marketplace between businesses that are based in different regions of the
world.
Advantages of Strategic Alliances
The first category is organizational advantages. You may wish to form a strategic
alliance to learn necessary skills and obtain certain capabilities from your strategic
partner. Strategic partners may also help you enhance your productive capacity,
provide a distribution system, or extend your supply chain.
A second category is economic advantage. You can reduce costs and risks by
distributing them across the members of the alliance. You can also obtain greater
economies of scale in an alliance, as production volume can increase, causing the cost
per unit to decline

TYPES OF STRATEGIC ALLIANCES

The main types of strategic alliances are listed below:

Joint Ventures
A joint venture is an agreement by two or more parties to form a single entity to
undertake a certain project. Each of the businesses has an equity stake in the
individual business and share revenues, expenses and profits.

Affiliate Marketing
Affiliate marketing has exploded over recent years, with the most successful online
retailers using it to great effect. The nature of the internet means that referrals can be
accurately tracked right through the order process.

Technology Licensing
This is a contractual arrangement whereby trade marks, intellectual property and trade
secrets are licensed to an external firm. Its used mainly as a low cost way to enter
foreign markets. The main downside of licensing is the loss of control over the
technology as soon as it enters other hands the possibility of exploitation arises.

Product Licensing
This is similar to technology licensing except that the license provided is only to
manufacture and sell a certain product. Usually each licensee will be given an
exclusive geographic area to which they can sell to. Its a lower-risk way of expanding
the reach of your product compared to building your manufacturing base and
distribution reach.

Franchising
Franchising is an excellent way of quickly rolling out a successful concept
nationwide. Franchisees pay a set-up fee and agree to ongoing payments so the
process is financially risk-free for the company. However, downsides do exist,
particularly with the loss of control over how franchisees run their franchise.

R&D
Strategic alliances based around R&D tend to fall into the joint venture category,
where two or more businesses decide to embark on a research venture through
forming a new entity.

Distributors
If you have a product one of the best ways to market it is to recruit distributors, where
each one has its own geographical area or type of product. This ensures that each
distributors success can be easily measured against other distributors.

Distribution Relationships
This is perhaps the most common form of alliance. Strategic alliances are usually
formed because the businesses involved want more customers.

BUSINESS POLICY
Definition of Business Policy
Business Policy defines the scope or spheres within which decisions can be taken by
the subordinates in an organization. It permits the lower level management to deal
with the problems and issues without consulting top level management every time for
decisions.
Business policies are the guidelines developed by an organization to govern its
actions. They define the limits within which decisions must be made. Business policy
also deals with acquisition of resources with which organizational goals can be
achieved. Business policy is the study of the roles and responsibilities of top level
management, the significant issues affecting organizational success and the decisions
affecting organization in long-run.
Features of Business Policy
An effective business policy must have following featuresSpecific- Policy should be specific/definite. If it is uncertain, then the implementation
will become difficult.
Clear- Policy must be unambiguous. It should avoid use of jargons and connotations.
There should be no misunderstandings in following the policy.
Reliable/Uniform- Policy must be uniform enough so that it can be efficiently
followed by the subordinates.
Appropriate- Policy should be appropriate to the present organizational goal.
Simple- A policy should be simple and easily understood by all in the organization.
Inclusive/Comprehensive- In order to have a wide scope, a policy must be
comprehensive.
Flexible- Policy should be flexible in operation/application. This does not imply that a
policy should be altered always, but it should be wide in scope so as to ensure that the
line managers use them in repetitive/routine scenarios.
Stable- Policy should be stable else it will lead to indecisiveness and uncertainty in
minds of those who look into it for guidance.

Difference between Policy and Strategy

The term policy should not be considered as synonymous to the term strategy.
The difference between policy and strategy can be summarized as followsPolicy is a blueprint of the organizational activities which are repetitive/routine in
nature. While strategy is concerned with those organizational decisions which have
not been dealt/faced before in same form.
Policy formulation is responsibility of top level management. While strategy
formulation is basically done by middle level management.
Policy deals with routine/daily activities essential for effective and efficient running
of an organization. While strategy deals with strategic decisions.
Policy is concerned with both thought and actions. While strategy is con